Case Study: SPDR S&P/ASX 200 Fund
Let's take a look at a domestic index ETF.
The largest ETF currently traded on ASX is the SPDR S&P/ASX 200 Fund - the 'SPDR 200' with ASX code 'STW'.
=he SPDR 200 is issued by State Street Global Advisors (SSGA), and tracks the S&P/ASX 200 index. The S&P/ASX 200 index measures the performance of the top 200 stocks on ASX, and represents over 80% of the Australian equity market capitalisation. It is regarded as the benchmark index of the Australian sharemarket.
What is the fund's investment objective?
The SPDR 200's investment objective is to provide investment returns, before fees and costs that closely correspond to the performance of the S&P/ASX 200 accumulation index, assuming you reinvest distributions in additional units in the ETF.
To complete the activity opposite you will need to go to Company Information on the ASX website, and enter the SPDR's ASX code that you found in the previous activity.
What are the costs?
As at January 2013 the Management Cost Ratio of the SPDR 200 is 0.286% of the fund's net asset value (NAV).
The management fee is factored into the NAV, so it is reflected in the ETF's price. You do not have to make a separate payment to the issuer.
Information about the NAV and underlying portfolio
Every day, the issuer - SSGA publishes the NAV, and details of the basket of securities underlying the ETF.
You can find NAV information on the issuer's website, and in the case of the SPDR 200, by going to Market Announcements on the ASX website.
There is also an indicative NAV that is continually updated during the trading day. You can find this on your broker's website by typing the code 'YSTW'
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