SPDR ETF – Pros & Cons

Being the one that made the ETF conquer the world comes with some extra points earned. But that was 25 years ago so here we will ask ourselves what SPDR brings to the ETF market in this mature and expanding market of today? We will discuss some pros and cons of SPDR ETF as seen from my own personal viewpoint.

The pros of SPDR ETF

State Street’s SPDR ETF is the number 3 in the world when we are looking at Assets Under Management (they have only BlackRock’s iShares and Vanguard in front of them). So it is no wonder that the pros of SPDR outbalance the cons. But what are the most outstanding pros of SPDR?

Wide range of ETF’s offered

SPDR offers over 100 ETF’s in a wide variety of sectors and commodities. Most of them are rightly balanced with a good weighing.

Very well situated in American market sectors

SPDR is an American ETF provider and it shows. State Street provides access to many different market sectors within the US. So if your main aim is the US market you cannot go round SPDR, they are number 1 in many interesting sectors such as Pharmaceuticals and Retail.

The number 1 in the S&P 500

Standard & Poor’s 500 is a very well-balanced US market index. It has been a golden choice for SPDR to choose this index as their first ETF created. 25 years later it is still the world’s most successful ETF when you look at assets under management. It is a great ETF and the large volume offers a very liquid market.

The cons of SPDR ETF

What are the weaknesses of SPDR ETF? Here a personal opinion:

Not a global spread in market sectors

One can say that SPDR is mainly focused on American market sectors. Looking at Asia and Europe they offer less interesting ETF’s especially compared to other ETF providers. That being said, you can’t be strong in all sectors.

Not focused on commodities

For trading commodity ETF’s ETF Securities offers a wider choice than SPDR. Again, not a real problem for customers but one might say that it SPDR is losing out on market share by not providing better commodity ETF’s.

Not the cheapest ETF provider

Without the exception of the most popular ETF (the SPDR S&P 500 ETF), most SPDR ETF’s are priced moderately. They are not among the cheapest according to costs and fees but in my opinion that is not the most important characteristic I am looking for in an ETF. Things like spread and weighing count much more to me.

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