What Is a SPDR?

SPDR ETFs May Be a Fit for Your Portfolio

SPDRs do not stick to walls nor do they scare people out of their curds and whey. In fact,​ an SPDR is not scary at all, but instead can be a nice potential fit for your investing strategy.

An SPDR, officially known as a Standard & Poors Depository Receipts, is like a mini-portfolio of stocks and derivatives with the goal of emulating an investment vehicle like an index or commodity. In short, SPDRs are types of ETFs that trade in the United States.

They track some of the most actively traded indexes and commodities on the U.S. exchanges.

What Is SPY?

For example, SPY is an SPDR ETF that tracks the S&P 500. So if you had an interest in the market, or specifically in the S&P 500, buying SPY shares may be the way to go for your strategy. The reason using an SPDR may be a bit easier than investing directly in an index is because the ETF is pre-packaged with shares of stocks in the actual S&P 500. The SPY SPDR requires only one transaction to gain instant exposure to the index and market. In the case of buying shares in the index, you would have to make multiple trades or purchases to fill your index basket as well as battle index pricing. This could increase your transaction costs and fees and make it difficult to get a desired price.

SPDRs also offer many advantages. Besides ease of use, one of the biggest advantage being the tax benefit.

Nothing scary about that at all. Not that an SPDR doesn’t have its disadvantages as well, but there is a reason SPDRs are some of the more popular investments.

And if you think SPDRs may be a potential fit for your portfolio, you’ve come to the right place. Not only have I put together a full list of SPDR ETFs to help you with your research, but we also have information to help you get started with ETFs.

And as for that list of SPDRs, be sure to check it often if these investments interest you. I'll be updating the list as new SPDRs are brought to the market and if any of the funds are delisted or stop trading, I'll remove them from the list as well. So I'll be updating that article as new things develop.

Final Thoughts

So, in the immortal words of a certain famous wall-crawler, with great power comes great responsibility. So it’s always important to thoroughly research any investment before you make any trades. And while SPDRs may be attractive, be sure to conduct your due diligence before making any trades. Check the history of the SPDR, understand the risks, watch the fund in action and see how it reacts to different market conditions. Also, take a look at what is in the fund as many SPDRs may contain derivatives such as futures and options. And if you have any questions or concerns, be sure to consult a financial professional, such as a broker or advisor.

However, once you are comfortable with SPDRs and ETFs, then it’s only matter of calling your friendly neighborhood Broker-Man. And once you do make your choice, then good luck with all of your trades.