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State Street delays four new sector funds' effective date to October 13

Select Sector SPDR Trust filed on Friday, September 25 to delay until Tuesday, October 13 the effective date for four proposed S&P 500 sector funds whose indexes do not use the 24% stock cap.

· 2 min read · ETF.net Research

Two modern glass hourglasses filled with beige and black sand rest on a clean white desk.

Key takeaways

  • Tickers and fees on the prospectus are still blank.
  • The new indexes do not use the 24% stock cap.
  • The listed funds in these sectors held $201.4 billion.
  • An effective date is not the same as a launch.

Select Sector SPDR Trust has delayed until Tuesday, October 13, the day four proposed S&P 500 sector funds can take effect. The shares are not offered yet, and the prospectus still leaves the tickers and fees blank.

On Friday, September 25, the trust moved the effective date of a registration it filed on Tuesday, July 14. That registration describes one fund each for consumer discretionary, consumer staples, energy and technology, and each would hold a market-cap-weighted basket of that sector's S&P 500 stocks.

Investors already hold those sectors in State Street's energy fund XLE, its consumer discretionary fund XLY, its technology fund XLK and its consumer staples fund XLP. The Select Sector indexes those funds track keep any one stock from exceeding 24%.

As of October 1, the four held $201.4 billion.

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Chart: ExxonMobil and Amazon sit just under the **Select Sector** ceiling

The July prospectus says each new index holds the same stocks as the matching Select Sector index, but weights them by market value, so it does not use that cap and a stock's weight can differ. The adviser would seek that index with a mix of the matching listed fund, stocks in the new index, and derivatives.

Those proposed funds would be separate funds in the same trust, proposed for NYSE Arca, and would not change the fees, indexes or names of the funds already listed, which charge 0.08%.

An effective date is not a launch date, and this one has already been moved once.

ETFs in this story

AXLEState Street Energy Select Sector SPDR ETF80/100AXLYState Street Consumer Discretionary Select Sector SPDR ETF79/100AXLKState Street Technology Select Sector SPDR ETF81/100AXLPState Street Consumer Staples Select Sector SPDR ETF83/100

Frequently asked questions

Which four sector funds were delayed?

The registration describes one fund each for consumer discretionary, consumer staples, energy and technology.

How would the new funds differ from the sector funds already listed?

Each new index holds the same stocks as the matching Select Sector index but weights them by market value, so it does not use the 24% cap.

Is October 13 the launch date?

An effective date is not a launch date, and this one has already been moved once.

Do the proposed funds have tickers or fees yet?

The shares are not offered yet, and the prospectus still leaves the tickers and fees blank.

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