What are SPDRs?
SPDRs (Symbol: SPY)
SPDRs trade on the AMEX
(AMEX: SPY).
The SPDR Trust Series is a pooled investment designed to provide
investment results that generally correspond to the price and yield
performance, before fees and expenses, of the S&P 500 Index. There is no
assurance that the performance of the S&P 500 Index can be fully matched,
but it does allow for more accurate
market timing.
Quote for SPDRs:
SPY
Trading SPDRs:
- SPDRs stand for Standard and Poor’s Depositary Receipts. Known as
"Spiders," a SPDR is a unit investment trust that holds shares of all
of the companies in the Standard & Poor’s 500 Composite Stock Price
Index (S&P 500). SPDRs closely track the price performance and
dividend yield of the S&P 500. There are also SPDRs that represent
other indexes or particular industry groups.
- Investors who purchase a SPDR own approximately one
tenth of the value of the S&P 500 and receive pro rata quarterly
dividends less expenses of the trust. Unlike an index mutual fund that
can only be bought and sold at the end of each trading day, SPDRs
trade throughout the trading day.
- SPDRs were first created back in January 1993 by a
subsidiary of the American Stock Exchange. They trade on the Amex, and
you can find them listed in quote servers under the symbol SPY.
However, it's pretty easy to figure out the price of a unit in the
trust -- it's always the current value of the S&P 500 Index divided by
10. If the S&P 500 Index stands at 1097.31, the unit price of a SPDR
is $109.73.
- You can buy shares in SPDRs at any time when the market is open.
(In comparison, you can only buy mutual fund shares at the end of the
trading day.) Any brokerage firm will happily assist you in purchasing
SPDRs for your portfolio, for a commission, of course.
Subscribe
or sign up for a
free membership and enjoy the
benefits.
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