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Select Sector SPDRs see 34 per cent rise in AUM


Select Sector SPDRs, a family of exchange-traded funds that divide the S&P 500 into nine individual sector funds, saw its collective assets under management climb by almost 34 per cent, or USD8.1bn, to close 2009 with a record USD31.3bn in AUM.

Equal sector investing, in which a portfolio is divided equally market sectors, beat the returns of the S&P 500 for the tenth year in a row.

“By all measures, 2009 was one of the most uncertain and volatile market environments in recent history,” says Dan Dolan (pictured), director of wealth management strategies for the Select Sector SPDR Trust, and architect of Select Sector SPDRs. “What’s evident, however, is that despite the tough investment climate last year, investors with properly allocated investment portfolios who used sector ETFs as substitutes for equities in a way that reduced single stock exposure were able to feel more optimistic about the long-term viability of their holdings.”

Leading the Sector SPDRs asset gainers for 2009 was technology, which soared 155.15 per cent to end the year with USD4.7bn, followed by consumer discretionary (+120.52 per cent, to close the year at USD1.48bn), and utilities (+86.38 per cent, to finish at USD3.64bn).

Materials, healthcare, energy, and industrials all ended 2009 with significant double-digit growth.

The only sector to end the year in a negative position was financials, which saw its assets dip by some USD960.8mi to close the last year of the decade down 12.32 per cent.

Short sellers had an active 2009, ratcheting up their positions across six of the nine sectors. Leading the increase in short positions was healthcare, which showed an increase of 111.16 per cent over 2008, followed by industrials, which gained 74.82 per cent over the previous 12 months. Energy (42.31 per cent), technology (16.48 per cent) and materials (12.93 per cent) were the only three sectors to show a decrease in short positions for the year.

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