State Street Global Advisers (SSgA) SPDRs ETF
State Street’s flagship ETF, the first ETF on the U.S. market, is the SPDR S&P 500 (SPY). It boasts almost $80 billion in net assets, nearly twice the assets of any other stock ETF on the market. That status will likely change over time, but for now, SSgA’s pet spider gives it a firm perch as the second-largest provider of ETFs.
State Street’s ETFs follow traditional indexes, carry reasonable fees, and are varied enough to allow for a very well-diversified portfolio, at least on the domestic equity side. All told, SSgA’s 100 U.S.-based ETFs hold about $245 billion in assets.
The management expenses — 0.35 percent on average — are reasonable, and offers a variety of funds, from which, if you were so inclined, you could build an entire portfolio. The Select Sector SPDRs offer a very efficient way of investing in various industry sectors (if that’s your thing).
The websites are topnotch, and the SPDRs website in particular offers some fabulous portfolio-construction tools, such as the Correlation Tracker, which allows you to find ETFs that best complement your existing portfolio.
One drawback to SSgA’s offerings is the legal structure of some of its ETFs. The oldest ETFs, such as SPY, are set up as unit investment trusts rather than open-end funds as most of the newer ETFs are. That means the older funds can’t reinvest dividends on a regular basis, creating a cash drag that can bring down long-term total returns. (It’s hard to measure the exact impact.)