How are SPDRs and MidCap SPDRs different from mutual funds and closed-end funds?
Unlike open-end mutual funds, SPDRs and MidCap SPDRs trade like stocks, allowing investors to buy or sell at any time during the trading day. Most open-end index funds process redemptions based on the funds net asset values at the markets close and then mail checks to redeeming investors. In volatile markets, if there is a glut of redemptions in open-end funds, exchange-traded index products like SPDRs and MidCap SPDRs permit investors to sell shares during the trading day, not just at the end of it. And whereas closed-end funds often trade at discounts to their net-asset values, an unlimited number of SPDR and MidCap SPDR trading units can be created, which helps ensure that they will correlate closely with the performance of the index component stocks in each trust s portfolio.
