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Old 11-23-2004, 10:57 PM
Tad Borek
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Default Re: SPDR vs. I-Shares

confused man wrote:
- quote -

> Is there an inherent difference between SPDR's and I-Shares? What aspects
> would lead an investor to invest in one over the other? It seems to me, if I
> were investing in these types of ETF's I would go with the SPDR's for the
> simple reason they seem to invest in the same sectors as I-Shares and their
> chart performance is roughly the same, but SPDR's has higher dividend
> yields.
> For Example
> IYH: div yield = 0.771%
> XLV: div yield = 1.214%
> IYE: div yield = 1.287%
> XLE: div yield = 1.351%


CM,
The holdings/weightings of those are slightly different and the expenses
are different, so it makes sense that the yields are a bit different.

I don't think there's a definitive answer to your Q though (whether you
should buy the one with the higher yield). The yield difference might
just reflect a higher weighting for a couple of the higher
dividend-paying stocks in the ETF. That doesn't necessarily mean the
long-term performance will be better for that ETF.

So check the holdings of each...if there are no meaningful differences,
then you might just buy the one with the lower expense ratio. In theory
that should win the total-return horse race over the long term. If you
do that be sure to check whether there's some kind of fee waiver in
place that might expire.

Another thing to factor in is the size of the market for the ETF. This
is a concern with some of the more obscure ETFs, they're not traded
enough, you see spreads and NAV discounts that are noticeable. So look
at the shares out for each and if one is tiny it might result in higher
spreads and a reduced reported yield (so buy the other). The
broad-market ETFs seem well beyond that point but some of the sector
ETFs are still kind of small, in terms of shares out.

-Tad

  #-1  
Old 11-22-2004, 08:12 PM
confused man
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Posts: n/a
Default SPDR vs. I-Shares

Hello All,

Is there an inherent difference between SPDR's and I-Shares? What aspects
would lead an investor to invest in one over the other? It seems to me, if I
were investing in these types of ETF's I would go with the SPDR's for the
simple reason they seem to invest in the same sectors as I-Shares and their
chart performance is roughly the same, but SPDR's has higher dividend
yields.

For Example
IYH: div yield = 0.771%
XLV: div yield = 1.214%

IYE: div yield = 1.287%
XLE: div yield = 1.351%

There are many other examples of this. So is my thinking flawed? please
advise.

Thanks,
Confused Man


 

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ishares, spdr
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