Close Close
Sign In
Newsletters
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards
Podcast Center Video Center Webcasts Resource Center Events
About ThinkAdvisor Contact Us Advertise With Us Asset & Logo Licensing Sitemap Terms of Service Privacy Policy Copyright © 2024 ALM Global, LLC. All Rights Reserved.
ThinkAdvisor

Portfolio > ETFs

State Street to Merge $1.8B Small Cap ETF Into Bigger Sibling

By Dinah Wisenberg Brin

X
Your article was successfully shared with the contacts you provided.

State Street Global Advisors recently decided to merge its SPDR S&P 600 Small Cap ETF (SLY), which has more than $1.8 billion in assets under management, into the SPDR Portfolio S&P 600 Small Cap ETF (SPSM), effective around June 9.

SPSM, which has more than $5.2 billion in AUM, tracks the same index as SLY — the S&P SmallCap 600 Index — and is part of the low-cost SPDR Portfolio ETF suite, the firm said.

SPSM has a 0.05% gross expense ratio, compared with 0.15% for SLY.

Each fund is an index fund that seeks to track, before fees and expenses, the performance of the S&P SmallCap 600 Index. The funds’ investment objectives, strategies and risks are the same, and the funds are managed by the same investment adviser, SSGA Funds Management Inc., according to a filing with the Securities and Exchange Commission.

“The merger of SLY and SPSM aligns the product suite by having one ETF track the S&P SmallCap 600 Index,” the firm said in a statement.

As a result of the merger, each SLY shareholder will receive shares of SPSM and cash in lieu of fractional SPSM shares, if any, equal in value to the SLY shares held prior to the merger, State Street said in its filing and an investor fact sheet.

The merger isn’t expected to result in income, gain or loss being recognized by SLY or its shareholders, except with respect to cash received in lieu of fractional shares, for U.S. federal income taxes purposes, according to State Street, which recommended investors consult with their tax advisor for advice on specific situations.

SLY shareholders need not take any action in connection with the merger, which isn’t subject to  SPSM shareholder approval, State Street said.

The firm also has decided to close three relatively small ETFs: The SPDR Bloomberg SASB Corporate Bond ESG Select ETF (RBND), SPDR Bloomberg SASB Developed Markets Ex US ESG Select ETF (RDMX) and the SPDR Bloomberg SASB Emerging Markets ESG Select ETF (REMG).

“The decision to close RBND, RDMX and REMG was made based on investor feedback and market demand during an ongoing review of the SPDR ETF offering that’s designed to ensure our lineup is well-positioned for long-term growth,” the firm said in a statement.

Investors have through April 11 to sell shares, and the funds will cease operations, liquidate assets and prepare to distribute proceeds to shareholders of record around April 17, according to SEC filings.

(Image: Bloomberg)

Dinah Wisenberg Brin

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.