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New ETF Brings Innovative Tech To Investors

January 14, 2016 3:11 pm
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New ETF Brings Innovative Tech To Investors

State Street Corp. (NYSE: STT)'s State Street Global Advisors (SSgA), the third-largest U.S. issuer of exchange traded funds, today added to its lineup of well-known technology ETFs with the debut of the SPDR FactSet Innovative Technology ETF (NYSE: XITK).

The SPDR FactSet Innovative Technology ETF follows the “FactSet Innovative Technology Index, which is designed to represent the performance of US-listed stocks and American Depository Receipts (ADRs) of technology-related companies with high revenue growth. The Index is designed to tracking companies within the highest growth segments of the technology sector and the electronic media sub-sector of the media sector,” according to SSgA

The SPDR FactSet Innovative Technology ETF is home to 86 companies with a weighted average market capitalization of $17.2 billion. XITK's underlying index is equal weighted, which helps reduce stock specific risk.

“In addition to traditional Technology companies, Electronic Media companies are included in the Index because of their core focus on technology and the integral role technology plays in determining how such companies operate, innovate and compete within their industry,” according to SSgA.

The new ETFs holdings have “disruptive” business models, are working on leading edge technologies or services, are engaged in potentially game-changing research or a combination of those traits.

"In today’s low growth environment, investors have expressed a desire to access companies with the greatest potential to create change. XITK provides exposure to technology-related companies with high revenue growth, including those with disruptive business models,” said Nick Good, chief operating officer of the US intermediary business at State Street Global Advisors, in a statement. “This means investing beyond the stalwarts of the tech space and capturing newer firms that are innovating and changing the landscape.”

As of the end of the fourth quarter, top 10 holdings in XITK's underlying index included Splunk Inc (NASDAQ: SPLK), Qualcomm, Inc. (NASDAQ: QCOM) and Yelp Inc (NYSE: YELP). The new ETF charges 0.45 percent per year, or $45 for each $10,000 invested.

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