Mutual Fund Summary Prospectus (497k)
01 November 2013 - 8:06AM
Edgar (US Regulatory)
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SPDR
®
Nuveen S&P High Yield Municipal Bond ETF
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HYMB
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(NYSE Ticker)
SUMMARY PROSPECTUS - OCTOBER 31, 2013
Before you invest in the SPDR Nuveen
S&P High Yield Municipal Bond ETF (the Fund), you may want to review the Funds prospectus and statement of additional information, which contain more information about the Fund and the risks of investing in the Fund. The
Funds prospectus and statement of additional information dated October 31, 2013, are incorporated by reference into this summary prospectus. You can find the Funds prospectus and statement of additional information, as well as other
information about the Fund, online at https://www.spdrs.com/product/fund.seam?ticker=HYMB. You may also obtain this information at no charge by calling (866) 787-2257 or by sending an e-mail request to Fund_Inquiry@ssga.com.
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INVESTMENT OBJECTIVE
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The SPDR Nuveen S&P High Yield Municipal Bond ETF (the Fund) seeks to provide investment results that, before fees and expenses,
correspond generally to the price and yield performance of an index that tracks the U.S. high yield municipal bond market and to provide income that is exempt from federal income taxes.
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FEES AND EXPENSES OF THE FUND
This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund (Shares). This table and the example below do not reflect brokerage commissions you may
pay on purchases and sales of the Funds Shares.
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ANNUAL FUND OPERATING EXPENSES
(expenses that you pay each year as a percentage of the value of your
investment):
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MANAGEMENT FEES
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0.50%
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DISTRIBUTION AND SERVICE (12b-1) FEES (1)
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0.00%
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OTHER EXPENSES
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0.00%
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TOTAL ANNUAL FUND OPERATING EXPENSES
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0.50%
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LESS CONTRACTUAL FEE WAIVER (2)
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(0.05)%
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NET ANNUAL FUND OPERATING EXPENSES (2)
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0.45%
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(1)
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The Fund has adopted a Distribution and Service (12b-1) Plan pursuant to which payments of up to 0.25% of average daily net assets may be made, however, the Board
has determined that no such payments will be made through at least October 31, 2014.
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(2)
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The Adviser has contractually agreed to waive its advisory fee and reimburse certain expenses, until October 31, 2014, so that the Net Annual
Fund Operating Expenses are limited to 0.45% of the Funds average daily net assets before application of any extraordinary expenses or acquired fund fees and expenses. The contractual fee waiver does not provide for the recoupment by the
Adviser of any fees the Adviser previously waived. The Adviser may continue the waiver from year to year, but there is no guarantee that the Adviser will do so and after October 31, 2014, it may be cancelled or modified at any time.
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EXAMPLE:
This example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Fund for the time
periods indicated, and then sell all of your Shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Funds operating expenses remain the same. Although your actual costs may be
higher or lower, based on these assumptions your costs would be:
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YEAR 1
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YEAR 3
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YEAR 5
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YEAR 10
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$46
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$155
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$275
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$623
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PORTFOLIO TURNOVER:
The Fund pays transaction costs, such as commissions, when it buys and sells securities (or turns over its portfolio). A
higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund Shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the
Funds performance. During the most recent fiscal year, the Funds portfolio turnover rate was 7% of the average value of its portfolio.
THE FUNDS PRINCIPAL INVESTMENT STRATEGY
In seeking to track the
performance of the S&P Municipal Yield Index (the Index), the Fund employs a sampling strategy, which means that the Fund is not required to purchase all of the securities represented in the Index. Instead, the Fund may purchase a
subset of the securities in the Index in an effort to hold a portfolio of securities with generally the same risk and return characteristics of the Index. The quantity of holdings in the Fund will be based on a number of factors, including asset
size of the Fund. Based on its analysis of these factors, Nuveen Asset Management, LLC (Nuveen Asset Management or the Sub-Adviser), the investment sub-adviser to the Fund, may invest the Funds assets in a subset of
securities in the Index or may invest the Funds assets in substantially all of the securities represented in the Index in approximately the same proportions as the Index.
Under normal market conditions, the Fund generally invests substantially all, but at least 80%, of its total assets in the securities comprising the Index or in securities that the Sub-Adviser
determines have economic characteristics that are substantially identical to the economic characteristics of the securities that comprise the Index. The Fund will provide shareholders with at least 60 days notice prior to any material
change in this 80% investment policy. Additionally, the Fund intends to invest, under normal circumstances, at least 80% of its net assets in investments the income of which is exempt from regular federal income tax. In addition, the Fund may invest
in debt securities that are not included in the Index, cash and cash equivalents or money market instruments, such as repurchase agreements and money market funds (including money market funds advised by SSgA Funds Management, Inc. (SSgA
FM or the Adviser), the investment adviser to the Fund).
The Index is designed to measure the performance of high
yield municipal bonds issued by U.S. states and territories or local governments or agencies, such that interest on the securities is exempt from regular federal income tax, but may be subject to the alternative minimum tax and to state and
local income taxes. High yield securities are generally rated below investment grade and are commonly referred to as junk bonds. The Index is a sub-set of the Standard & Poors/Investortools Municipal Bond Index and
includes publicly issued U.S. dollar denominated, fixed rate, municipal bonds (including private activity bonds) that have a remaining maturity of at least one year. The Index will consist of categories of bonds in the following proportions:
(i) 70% of the Index constituents are components of the Standard & Poors/Investortools High Yield Bond Index, which are non-rated or are rated below investment grade (ii) 20% of the Index constituents are components of the
Standard & Poors/Investortools Bond Index that are rated Baa3, Baa2, or Baa1 by Moodys Investors Service, or BBB-, BBB, or BBB+ by Standard and Poors or Fitch; and (iii) 10% of the Index constituents are components of
the Standard & Poors/Investortools Bond Index that are rated A3, A2, or A1 by Moodys Investor Services, or A-, A, or A+ by Standard & Poors or Fitch. Prerefunded bonds and bonds that have been escrowed to maturity
will not be included in the Index. Where the ratings assigned by the agencies are not consistent, the Index will use the middle rating, if three ratings are available and the lower of two ratings if only two ratings are available.
The Standard & Poors/Investortools Municipal Bond Index is composed of bonds held by managed municipal bond fund customers of
Standard & Poors Securities Pricing, Inc. that are priced daily. Index calculations are provided by Investortools, Inc. Only bonds with total outstanding amounts of $2,000,000 or more qualify for inclusion. The Standard and
Poors/Investortools Municipal Bond High Yield Index is comprised of all bonds in the Standard and Poors/Investortools Municipal Bond Index that are non-rated or whose ratings are BB+ S&P and /or BA-1 Moodys or lower. As of
September 30, 2013, there were approximately 29,234 issues included in the Index.
The Index is sponsored by S&P Dow Jones
Indices LLC (the Index Provider) which is not affiliated with the Fund, the Adviser or the Sub-Adviser. The Index Provider determines the composition of the Index, relative weightings of the securities in the Index and publishes
information regarding the market value of the Index.
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PRINCIPAL RISKS OF INVESTING IN
THE FUND
As with all investments, there are certain risks of investing in the Fund, and you could lose money on an investment in the
Fund.
PASSIVE STRATEGY/INDEX RISK:
The Fund is managed with a passive investment strategy, attempting to track the performance of an unmanaged index of securities. This differs from an actively managed fund, which
typically seeks to outperform a benchmark index. As a result, the Fund may hold constituent securities of the Index regardless of the current or projected performance of a specific security or a particular industry or market sector. Maintaining
investments in securities regardless of market conditions or the performance of individual securities could cause the Funds return to be lower than if the Fund employed an active strategy.
INDEX TRACKING RISK:
While the Sub-Adviser seeks to track the performance of the Index as closely as possible
(i.e.,
achieve a high degree of correlation with the Index), the Funds return may
not match or achieve a high degree of correlation with the return of the Index due to operating expenses, transaction costs, cash flows, regulatory requirements and operational inefficiencies. For example, the Sub-Adviser anticipates that it may
take several business days for additions and deletions to the Index to be reflected in the portfolio composition of the Fund.
DEBT SECURITIES INVESTING RISK:
The value of the
debt securities may increase or decrease as a result of the following: market fluctuations, increases in interest rates, inability of issuers to repay principal and interest or illiquidity in the debt securities markets; the risk of low rates of
return due to reinvestment of securities during periods of falling interest rates or repayment by issuers with higher coupon or interest rates; and/or the risk of low income due to falling interest rates. To the extent that interest rates rise,
certain underlying obligations may be paid off substantially slower than originally anticipated and the value of those securities may fall sharply. This may result in a reduction in income from debt securities income.
HIGH YIELD SECURITIES RISK:
Securities rated below investment grade, commonly referred to as junk bonds, include bonds that are rated Ba1/BB+/BB+ or below by Moodys Investors Service, Inc., Fitch
Inc., and Standard & Poors, Inc., respectively, or unrated securities considered to be of equivalent quality by the Sub-Adviser, and may involve greater risks than securities in higher rating categories. Such bonds are regarded as
speculative in nature, involve greater risk of default by the issuing entity and may be subject to greater market fluctuations than higher rated debt securities. The retail secondary market for these junk bonds may be less liquid than
that of higher rated securities and adverse conditions could make it difficult at times to sell certain securities or could result in lower prices than those used in calculating the Funds net asset value. As the Fund invests in junk
bonds, it is also subject to greater credit risk (i.e., the risk that an issuer may be unable or unwilling to make interest and principal payments when due) because it may invest in debt securities not current in the payment of interest or
principal or in default.
PRIVATE ACTIVITY BONDS
RISK:
Private activity bonds are issued by or on behalf of public authorities to obtain funds to provide privately operated housing facilities, airport, mass transit or
port facilities, sewage disposal, solid waste disposal or hazardous waste treatment or disposal facilities and certain local facilities for water supply, gas or electricity. Other types of private activity bonds, the proceeds of which are used for
the construction, equipment, repair or improvement of privately operated industrial or commercial facilities, may constitute municipal securities, although the current federal tax laws place limitations on the size of such issues. The credit and
quality of private activity bonds are usually related to the credit of the corporate user of the facilities. Payment of interest on and repayment of principal of such bonds are the responsibility of the corporate user (and/or any guarantor). The
Funds distributions of its interest income from private activity bonds may subject certain investors to the federal alternative minimum tax.
POLITICAL RISK:
A significant restructuring of
federal income tax rates or even serious discussion on the topic in Congress could cause municipal bond prices to fall. The demand for municipal securities is strongly influenced by the value of tax-exempt income to investors. Lower income tax rates
could reduce the advantage of owning municipal securities.
TAX RISK:
There is no guarantee that the Funds income will be exempt from regular federal or state income taxes. Events occurring after the date of issuance of a municipal bond or after the
Funds acquisition of a municipal bond may result in a determination that interest on that bond is includible in gross income for federal income tax purposes retroactively to its date of issuance. Such a determination may cause a portion of
prior distributions by the Fund to its
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shareholders to be taxable to those shareholders in the year of receipt. Federal or state changes in income or alternative minimum tax rates or in the tax treatment of municipal bonds may make
municipal bonds less attractive as investments and cause them to decline in value.
NON-DIVERSIFICATION RISK:
The Fund is non-diversified and may invest a larger percentage of its assets in securities
of a few issuers or a single issuer than that of a diversified fund. As a result, the Funds performance may be disproportionately impacted by the performance of relatively few securities.
FUND PERFORMANCE
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The following bar chart and table provide an indication of the risks of investing in the Fund by showing the Funds performance for the most recent calendar year and by
showing how the Funds average annual returns for certain time periods compare with the average annual returns of the Index. The Funds past performance (before and after taxes) is not necessarily an indication of how the Fund will perform
in the future. Updated performance information is available online at
http://www.spdrs.com
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ANNUAL TOTAL RETURN
(years ended 12/31)*
Highest
Quarterly Return: 4.85% (Q1 2012)
Lowest Quarterly Return: 3.08% (Q4 2012)
* As of September 30,
2013, the Funds Calendar Year-To-Date return was -7.22%.
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AVERAGE ANNUAL TOTAL RETURNS
(for periods ending 12/31/12)
The after-tax returns presented in the table below are calculated using highest historical individual federal marginal income tax rates and do not
reflect the impact of state and local taxes. Your actual after-tax returns will depend on your specific tax situation and may differ from those shown below. After-tax returns are not relevant to investors who hold Shares of the Fund through
tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. The returns after taxes can exceed the return before taxes due to an assumed tax benefit for a shareholder from realizing a capital loss on a sale of Fund Shares.
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ONE YEAR
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SINCE INCEPTION
(4/13/11)
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RETURN BEFORE TAXES
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16.78%
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15.54%
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RETURN AFTER TAXES ON DISTRIBUTIONS
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16.78%
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15.49%
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RETURN AFTER TAXES ON DISTRIBUTIONS AND SALE OF FUND SHARES
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12.87%
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14.09%
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S&P MUNICIPAL YIELD INDEX
(reflects no deductions for fees, expenses or taxes)
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15.50%
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15.74%
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PORTFOLIO MANAGEMENT
INVESTMENT ADVISER
SSgA FM serves as the investment adviser to the
Fund. Nuveen Asset Management serves as sub-adviser to the Fund, subject to supervision by the Adviser and the Board of Trustees. To the extent that a reference in this Prospectus refers to the Adviser, such reference should also be
read to refer to Nuveen Asset Management with respect to the Fund where the context requires.
PORTFOLIO MANAGERS
The professionals primarily responsible for the day-to-day management of the Fund are Timothy T. Ryan and Steven M. Hlavin.
TIMOTHY T. RYAN
is a
Senior Vice President and Portfolio Manager at Nuveen Asset Management. Mr. Ryan joined an affiliate of Nuveen Asset Management in 2010.
STEVEN M. HLAVIN
is a Vice President and Portfolio Manager at Nuveen
Asset Management. Mr. Hlavin joined an affiliate of Nuveen Asset Management in 2003.
PURCHASE AND SALE INFORMATION
The Fund will issue (or redeem) Shares to certain institutional investors (typically market makers or other broker-dealers) only in large blocks of 100,000 Shares known as Creation
Units. Creation Unit transactions are typically conducted in exchange for the deposit or delivery of in-kind securities and/or cash constituting a substantial replication, or a representation, of the securities included in the Funds
benchmark Index.
Individual Shares of the Fund may only be purchased and sold on the NYSE Arca, Inc., other national securities
exchanges, electronic crossing networks and other alternative trading systems through your broker-dealer at market prices. Because Fund Shares trade at market prices rather than at net asset value (NAV), Shares may trade at a price
greater than NAV (premium) or less than NAV (discount).
TAX INFORMATION
The Fund intends to pay income that is exempt from regular federal income tax, but which may be subject to the federal alternative minimum tax (AMT). To the extent the Fund invests in
securities that do not produce income exempt from regular federal income tax and/or the AMT, a portion of the Funds distributions may be subject to such taxes. Income from municipal securities of states other than the shareholders state
of residence generally will not qualify for tax-free treatment for such shareholder with respect to state and local taxes.
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SPDR Series Trust
One Lincoln Street
Boston, MA 02111
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Precise in a world that isnt.
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