|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:
- 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.