Mutual Fund Summary Prospectus (497k)
October 31 2012 - 2:48PM
Edgar (US Regulatory)
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SPDR
®
S&P
®
Oil & Gas Exploration & Production ETF
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XOP
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(NYSE Ticker)
SUMMARY PROSPECTUS - OCTOBER 31, 2012
Before you invest in the SPDR S&P Oil & Gas Exploration & Production ETF (the Fund), you may want to review the Funds
prospectus and statement of additional information, which contain more information about the Fund and the risks of investing in the Fund. The Funds prospectus and statement of additional information dated October 31, 2012, are incorporated by
reference into this summary prospectus. You can find the Funds prospectus and statement of additional information, as well as other information about the Fund, online at https://www.spdrs.com/product/fund.seam?ticker=XOP. You may also obtain
this information at no charge by calling (866) 787-2257 or by sending an e-mail request to Fund_inquiry@ssga.com.
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INVESTMENT
OBJECTIVE
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The SPDR S&P Oil & Gas Exploration & Production ETF (the Fund) seeks to provide investment results that,
before fees and expenses, correspond generally to the total return performance of an index derived from the oil and gas exploration and production segment of a U.S. total market composite index.
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FEES AND EXPENSES OF THE FUND
This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund (Shares). This table and the example below do not reflect brokerage commissions you may
pay on purchases and sales of the Funds Shares.
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ANNUAL FUND OPERATING EXPENSES
(expenses that you pay each year as a percentage of the value of your
investment):
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MANAGEMENT FEES
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0.35%
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DISTRIBUTION AND SERVICE (12b-1) FEES*
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None
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OTHER EXPENSES
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0.00%
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TOTAL ANNUAL FUND OPERATING EXPENSES
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0.35%
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*
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The Fund has adopted a Distribution and Service (12b-1) Plan pursuant to which payments of up to 0.25% of average daily net assets may be made, however, the Board
has determined that no such payments will be made through at least October 31, 2013.
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EXAMPLE:
This example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example assumes
that you invest $10,000 in the Fund for the time periods indicated, and then sell all of your Shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Funds operating expenses
remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
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YEAR 1
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YEAR 3
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YEAR 5
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YEAR 10
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$36
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$113
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$197
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$443
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PORTFOLIO TURNOVER:
The Fund pays transaction costs, such as commissions, when it buys and sells securities (or turns over its portfolio). A higher portfolio turnover rate may indicate higher transaction
costs and may result in higher taxes when Fund Shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Funds performance. During the most recent fiscal year,
the Funds portfolio turnover rate was 42% of the average value of its portfolio.
THE FUNDS PRINCIPAL INVESTMENT STRATEGY
In seeking to track the performance of the S&P Oil & Gas Exploration & Production Select Industry Index (the
Index), the Fund employs a replication strategy, which means that the Fund typically invests in substantially all of the securities represented in the Index in approximately the same proportions as the Index.
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Under normal market conditions, the
Fund generally invests substantially all, but at least 80%, of its total assets in the securities comprising the Index. The Fund will provide shareholders with at least 60 days notice prior to any material change in this 80% investment policy.
In addition, the Fund may invest in equity securities that are not included in the Index, cash and cash equivalents or money market instruments, such as repurchase agreements and money market funds (including money market funds advised by SSgA Funds
Management, Inc. (SSgA FM or the Adviser), the investment adviser to the Fund).
The Index represents the oil and
gas exploration and production industry group of the S&P Total Market Index (S&P TMI). The Index is one of twenty-five (25) of the S&P Select Industry Indices (the Select Industry Indices), each designed
to measure the performance of a narrow sub-industry or group of sub-industries determined based on the Global Industry Classification Standards (GICS). Membership in the Select Industry Indices is based on the GICS classification, as
well as liquidity and market cap requirements. Companies in the Select Industry Indices are classified based primarily on revenues; however, earnings and market perception are also considered. The Index consists of the S&P TMI constituents
belonging to the particular GICS sub-industry or group of sub-industries that satisfy the following criteria: (i) have a float-adjusted market capitalization above $500 million with a float-adjusted liquidity ratio (defined by dollar value
traded over the previous 12 months divided by the float-adjusted market capitalization as of the index rebalancing reference date) above 90%
or
have a float-adjusted market capitalization above $400 million with a float-adjusted
liquidity ratio (as defined above) above 150%; and (ii) are U.S. based companies. The length of time to evaluate liquidity is reduced to the available trading period for initial public offerings or spin-offs that do not have 12 months
of trading history. If there are fewer than 35 stocks, stocks from a supplementary list of highly correlated sub-industries that meet the market capitalization and liquidity thresholds are included in order of their float-adjusted market
capitalization. The market capitalization threshold may be relaxed to ensure that there are at least 22 stocks in the Index as of the rebalancing effective date. Existing Index constituents are removed at the quarterly rebalancing effective date if
either their float-adjusted market capitalization falls below $300 million or their float-adjusted liquidity ratio falls below 50%. The market capitalization threshold and the liquidity threshold are each reviewed from time to time based on
market conditions. Rebalancing occurs on the third Friday of the quarter ending month. The S&P TMI tracks all the U.S. common stocks listed on the NYSE (including NYSE Arca and NYSE Amex), the NASDAQ Global Select Market, the NASDAQ Select
Market and the NASDAQ Capital Market. The Index is an equal weighted market cap index. As of September 30, 2012, the Index was comprised of 72 stocks.
The Index is sponsored by S&P Dow Jones Indices LLC (the Index Provider) which is not affiliated with the Fund or the Adviser. The Index Provider determines the composition of the
Index, relative weightings of the securities in the Index and publishes information regarding the market value of the Index.
PRINCIPAL RISKS OF INVESTING IN THE FUND
As with all investments, there are certain risks of investing in the Fund, and you could lose money on an investment in the Fund.
PASSIVE STRATEGY/INDEX RISK:
The Fund is managed with a passive investment strategy, attempting to track the performance of an unmanaged index of securities. This differs from an actively managed fund, which
typically seeks to outperform a benchmark index. As a result, the Fund may hold constituent securities of the Index regardless of the current or projected performance of a specific security or a particular industry or market sector. Maintaining
investments in securities regardless of market conditions or the performance of individual securities could cause the Funds return to be lower than if the Fund employed an active strategy.
INDEX TRACKING RISK:
While the Adviser seeks to track the performance of the Index as closely as possible (
i.e.,
achieve a high degree of correlation with the Index), the Funds return may not
match or achieve a high degree of correlation with the return of the Index due to operating expenses, transaction costs, cash flows, regulatory requirements and operational inefficiencies. For example, the Adviser anticipates that it may take
several business days for additions and deletions to the Index to be reflected in the portfolio composition of the Fund.
OIL AND GAS SECTOR RISK:
The Funds assets will generally be concentrated in the oil and gas exploration and production industry, which means the Fund will be more affected by the performance of the oil and
gas exploration and production industry versus a fund that was more diversified. Companies in the oil and gas sector develop and produce crude oil and natural gas and provide drilling and other energy resources production and distribution related
services. Stock prices for these types of companies are affected by supply and demand both for their specific product or service and for energy products in general. The price of oil and gas, exploration and production spending, government
regulation, world events and
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economic conditions will likewise affect the performance of these companies. Correspondingly, securities of companies in the energy field are subject to swift price and supply fluctuations caused
by events relating to international politics, energy conservation, the success of exploration projects, and tax and other governmental regulatory policies. Weak demand for the companies products or services or for energy products and services
in general, as well as negative developments in these other areas, would adversely impact the Funds performance. Oil and gas exploration and production can be significantly affected by natural disasters as well as changes in exchange rates,
interest rates, government regulation, world events and economic conditions. These companies may be at risk for environmental damage claims.
ENERGY SECTOR RISK:
Energy companies develop and produce
oil, gas and consumable fuels and provide drilling and other energy resources production and distribution related services. Stock prices for these types of companies are affected by supply and demand, exploration and production spending, world
events and economic conditions, swift price and supply fluctuations, energy conservation, the success of exploration projects, liabilities for environmental damage and general civil liabilities and tax and other governmental regulatory policies.
Weak demand for energy companies products or services or for energy products and services in general, as well as negative developments in these other areas, including natural disasters or terrorist attacks, would adversely impact the
Funds performance.
EQUITY INVESTING
RISK:
An investment in the Fund involves risks similar to those of investing in any fund of equity securities, such as market fluctuations, changes in interest rates and
perceived trends in stock prices.
NON-DIVERSIFICATION
RISK:
The Fund is non-diversified and may invest a larger percentage of its assets in securities of a few issuers or a single issuer than that of a diversified fund. As a
result, the Funds performance may be disproportionately impacted by the performance of relatively few securities.
FUND PERFORMANCE
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The following bar chart and table provide an indication of the risks of investing in the Fund by showing changes in the Funds performance from year to year and by
showing how the Funds average annual returns for certain time periods compare with the average annual returns of the Index. The Funds past performance (before and after taxes) is not necessarily an indication of how the Fund will perform
in the future. Updated performance information is available online at
http://www.spdrs.com
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ANNUAL TOTAL RETURN
(years ended 12/31)*
* As of September 30, 2012, the Funds Calendar
Year-To-Date return was 6.49%.
Highest Quarterly
Return: 30.52% (Q2 2008)
Lowest Quarterly Return: -35.77% (Q3 2008)
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AVERAGE ANNUAL TOTAL RETURNS
(for periods ending 12/31/11)
The after-tax returns presented in the table below are calculated using highest historical individual federal marginal income tax rates and do not
reflect the impact of state and local taxes. Your actual after-tax returns will depend on your specific tax situation and may differ from those shown below. After-tax returns are not relevant to investors who hold Shares of the Fund through
tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. The returns after taxes can exceed the return before taxes due to an assumed tax benefit for a shareholder from realizing a capital loss on a sale of Fund Shares.
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ONE YEAR
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FIVE YEARS
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SINCE INCEPTION
(6/19/06)
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RETURN BEFORE TAXES
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0.91%
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7.31%
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8.95%
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RETURN AFTER TAXES ON DISTRIBUTIONS
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0.67%
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7.19%
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8.84%
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RETURN AFTER TAXES ON DISTRIBUTIONS AND SALE OF FUND SHARES
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0.74%
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6.30%
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7.77%
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S&P OIL & GAS EXPLORATION & PRODUCTION SELECT INDUSTRY INDEX
(reflects no deduction for fees, expenses or
taxes)
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1.05%
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7.58%
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9.22%
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PORTFOLIO MANAGEMENT
INVESTMENT ADVISER
SSgA FM serves as the investment adviser to the Fund.
PORTFOLIO MANAGERS
The professionals primarily responsible for the day-to-day management of the Fund are Mike Feehily and John Tucker.
MIKE FEEHILY, CFA
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is a Managing Director of the Adviser. He joined the Adviser in 1997, moved to State Street Global Markets LLC in 2006 and rejoined the Adviser in 2010.
JOHN TUCKER, CFA
, is a Senior Managing Director of the Adviser. He
joined the Adviser in 1988.
PURCHASE AND SALE INFORMATION
The Fund will issue (or redeem) Shares to certain institutional investors (typically market makers or other broker-dealers) only in large blocks of 50,000 Shares known as Creation Units.
Creation Unit transactions are typically conducted in exchange for the deposit or delivery of in-kind securities and/or cash constituting a substantial replication, or a representation, of the securities included in the Funds benchmark Index.
Individual Shares of the Fund may only be purchased and sold on the NYSE Arca, Inc., other national securities exchanges, electronic
crossing networks and other alternative trading systems through your broker-dealer at market prices. Because Fund Shares trade at market prices rather than at net asset value (NAV), Shares may trade at a price greater than NAV (premium)
or less than NAV (discount).
TAX INFORMATION
The Funds distributions are expected to be taxed as ordinary income and/or capital gains, unless you are investing through a tax-deferred arrangement, such as a 401(k) plan or individual
retirement account.
XOPSUMPRO
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Precise in a world that isnt.
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