How can the performance of SPDRs and MidCap SPDRs diverge from the underlying indexes?
Because the underlying S&P 500 and S&P MidCap 400 indexes are not investment instruments, they incur no expenses, which are therefore not reflected in the index values. The net asset values of SPDRs and MidCap SPDRs reflect trust expenses and include accrued dividends. The indexes do not take accrued dividends into account. Also, over time, SPDRs and MidCap SPDRs may be rebalanced to reflect changes in the indexes and to ensure proper security weightings as the prices of underlying stocks change. The resulting transaction costs are incurred by the SPDR and MidCap SPDR portfolios but not by the underlying indexes.
Related Questions
- How does the performance of SPDRs and MidCap SPDRs compare with the performance of the S&P 500 and S&P MidCap 400 Indexes?
- How closely correlated is the performance of SPDRs and MidCap SPDRs with the underlying indexes?
- How can the performance of NASDAQ-100 Index Tracking Stock diverge from the underlying Index?
