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  • What is the story here?

    State Street was a pioneer and first mover in the ETFs (SPY was the 1st ever ETF in 01/1993).

    For many years, the SEC had approved the ETFs as exceptions to mutual funds, and over time, these exceptions created ETFs with slightly different twists. Firms hung on to these older versions of ETFs because the newer rules were quite different. Some older ETFs also had decent past history and good liquidity due to better intuitional acceptance even when some had high ERs.

    So, many firms developed entirely new "core" versions of their older ETFs that had lower ERs, but the AUMs started out low, and liquidity was not good for institutions, but OK for retail. This is ETF industry version of having its cake and eating it too.

    That is how the "SPDR Portfolio" ETFs came about in 10/2017. These were just what the others have called their "core" ETFs (BlackRock's iShares come to mind and there are several others).

    More recently, there were reforms for the ETFs in 09/2019 and all these older ETF structures based on ETFs-as-exceptions-to-mutual-funds were dumped, and new ETF structures were developed and applied uniformly to almost all ETFs.

    Now to SLY vs SPSM.

    SPDR SLY started in 11/2005. Its current AUM is $1.8 billion and ER is 0.15%. Its benchmark was always SP SC 600.

    SPDR Portfolio SPSM started out in 07/2013 with a different SC index, that was changed to another SC index, and finally changed to SP SC 600 in 2020. Its current AUM is $5.2 billion (much bigger than the original SLY) and ER is 0.05% (much lower than the original SLY).

    So, now, after the changes to SPSM in 2020, the 2 became identical! Why not merge them?

    And that is what State Street is doing now with 06/2023 target. If anything, what took them so long?
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