Here are answers to frequently asked questions about our Australian-domiciled ETFs. If you have questions that aren't answered in this list, please contact our SPDR ETF team on the number below.

Investing in SPDR ETFs
  • What are SPDR ETFs?

    An ETF is a collection of securities that typically track the performance of a broad or specific segment of the market e.g. Australian and international shares, small and large-cap shares, Australian bonds or commodities. SPDR ETFs are a family of ETFs offered by State Street Global Advisors that trade on the Australian Securities Exchange (ASX). They are priced continually and can be bought and sold throughout the trading day. SPDR ETFs are bought by thousands of Australian investors, whether it's through SMSF or directly, and provide liquid, cost-efficient exposure to a broad range of assets.

  • What is the difference between an ETF and a managed fund?

    There are several differences between managed funds and ETFs. To cite a few:

    Like managed funds, ETFs allow investors to track hundreds of Australian and international indices, including the S&P 500® and the S&P®/ASX 200 indices, as well as specific sectors or industries (e.g. financials, resources or listed property)

    Unlike managed funds:

    • ETFs give investors the flexibility to buy and sell on the Australian exchanges throughout the day, at the market price. Managed funds may only be purchased or sold at the fund's net asset value (NAV), which is calculated at the end of the trading day.
    • Securities held within most ETFs are posted daily allowing investors to make informed portfolio decisions in real time. However, managed funds generally release their holdings periodically, for example quarterly.
    • When ETF investors sell their holdings, portfolio managers do not need to sell securities to raise cash for the redemptions. So, unlike traditional unlisted funds, one ETF investor's sell decision has no impact on other investors and capital gains distributions are kept low.

    Talk to your investment adviser to determine which one is right for you.

  • Why do investors buy SPDR ETFs?

    The most common reason is to gain low cost access to a new asset class in a single trade or to further diversify an existing asset allocation to minimise stock specific risk. Another popular approach is to use ETFs to achieve a core-satellite strategy. This means an investor holds a relatively stable and diversified investment as a "core" holding, adding "satellite" positions around this core in the hope of generating additional returns.

  • How are SPDR ETFs priced?

    ETFs are designed to trade at a price that approximates the market value of their underlying assets. To facilitate this, most ETFs publish detailed information about their portfolio holdings on a daily basis. Doing so enables investors to identify when an ETF is over-valued or under-valued relative to its underlying assets and to transact accordingly. Additionally, certain large market participates, known as "authorised participants", create and redeem directly with the ETF in large blocks helping to keep the trading price of the ETF in line with the market value of their underlying assets.

  • Are SPDR ETFs physically backed?

    All SPDR ETFs are physically backed, that is, they hold the assets underlying the associated index.

  • What are the underlying investments?

    Underlying investment refer to the securities that make up the benchmark index. SPDR ETFs will invest only in those securities. Details of the index composition and holdings can be found on this website or in the ETF's Product Disclosure Statement.

  • What are the cost advantages in investing in SPDR ETFs?

    SPDR ETFs are designed to be cost-efficient. As an indexed investment, they can have the advantage of being less expensive to operate and therefore typically have lower management costs. Management costs have become increasingly important to investors because they can have a significant impact on your portfolio's return and potential for wealth accumulation.

  • What are cross-listed ETFs?

    ETFs which are domiciled outside of Australia and listed on an overseas exchange (e.g. in the U.S) cannot be traded and settled on the ASX. Some of these offshore ETFs are made available for trading on the ASX in the form of CHESS Depository Interests (CDIs) which mirror the interests in the offshore ETF. Such ETFs are sometimes described in the marketplace as being 'cross-listed' but it is important to note that you do not hold interests in the offshore ETF directly as it is listed on its overseas primary market, instead you hold CDIs. The CDIs trade like any other securities quoted on the ASX. An example of such an ETF is the U.S. domiciled SPDR® S&P 500® ETF Trust which is principally listed and traded on NYSE Arca, Inc. under the symbol "SPY". CDIs have been created over units in SPY and are quoted on the AQUA market of the ASX and interests in the U.S. SPY fund are also traded on other global exchanges such as Japan and Singapore.

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