State Street Launches Mortgage Sector ETF
April 30, 2009

SAN DIEGO (ETFguide.com) - State Street Global Advisors (SSgA), the investment management arm of State Street Corporation (NYSE: STT), introduced the SPDR KBW Mortgage Finance ETF (NYSEArca: KME) today.

The new mortgage finance ETF is benchmarked to the KBW Mortgage Finance Index and charges annual expenses of 0.35%. The index is modified market-capitalization weighted and has a mix of pure mortgage players, mortgage processors, title insurers, homebuilders, and banks and thrifts where mortgage loans dominate the loan book.

KME contains market exposure to 24 U.S. mortgage finance companies and the fund’s top three holdings are Fidelity National Financial (8.30%), New York Community Bancorp (8.16%) and Hudson City Bancorp (8.03%).

The new mortgage sector SPDR ETF will compete with the iShares FTSE NAREIT Mortgage REIT ETF (NYSEArca: REM). Since the beginning of the year, mortgage stocks within REM have declined 9.15% compared to a 1.46% decline in the total U.S. stock market (NYSEArca: TMW). REM has around $34 million in assets and charges annual expenses of 0.48%.

 “The introduction of KME strengthens our suite of SPDR KBW ETFs, which are designed to help investors express a tactical view on industries within the financial services sector,” said Anthony Rochte, senior managing director at State Street Global Advisors.

The SPDR KBW family of exchange traded funds include the SPDR KBW Bank ETF (NYSEArca: KBE), SPDR KBW Capital Markets ETF (NYSEArca: KCE), SPDR KBW Insurance ETF (NYSEArca: KIE), SPDR KBW Regional Banking ETF (NYSEArca: KRE), and SPDR KBW Mortgage Finance ETF (NYSEArca: KME).  Assets under management in these financial services sector ETFs totaled about $1.2 billion at the end of March.