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State Street Global Advisors’ Select Sector SPDR Funds Record Daily Trading Volume of Over 1.2 Million Shares in First Year of Trading

State Street Global Advisors’ Select Sector SPDR Funds Record Daily Trading Volume of Over 1.2 Million Shares in First Year of Trading

Business Editors

BOSTON–(BUSINESS WIRE)–Dec. 22, 1999

$1.8 Billion Invested Across Nine Industry Sector Funds

State Street Global Advisors (SSgA), the investment management arm of State Street Corporation (NYSE:STT), today announced that its Select Sector SPDR (“Spider”) funds traded an average daily volume of over 1.2 million shares during their first year of trading. Select Sector SPDRs are exchange-traded funds that “unbundle” the S&P 500 Index into nine sector funds comprising shares of S&P 500 companies that can each be bought and sold like shares of stock.

“We are extremely pleased with the success of the Select Sector SPDR funds and believe their high trading volume in 1999 reflects investors’ interest in having the ability to cost-effectively allocate assets to suit their own objectives, whether to invest in a specific sector or utilize a sector rotation strategy in their portfolios,” said Agustin Fleites, principal of SSgA.

SSgA, which advises the funds, collaborated with Merrill Lynch and the American Stock Exchange (Amex) to launch the nine funds on December 22, 1998. State Street Bank and Trust Company, collaborated on the development of the fund as well as providing legal, compliance, custody and transfer agency services. Shares of the funds trade as part of the Amex’s Index Share Marketplace. Amex also trades options on shares of Select Sector SPDR Funds. Merrill Lynch was the primary Participating Dealer in the initial launch, which exceeded $450 million.

Lawrence G. Larkin, senior vice president at The American Stock Exchange and head of their Index Share(SM) Marketplace, commented: “The Select Sector SPDR funds are a compelling long-term investment opportunity as they appeal to a variety of investment objectives and, because they are tax efficient and passively managed, they have remarkably low costs. We are excited about their growth potential in the coming years.”

Each Select Sector SPDR fund is designed to track the price performance and dividend yield net of expenses of a particular Select Sector Index. Select Sector SPDR funds may bear a higher level of risk than more broadly diversified funds. The nine sectors are Basic Industries, Consumer Services, Consumer Staples, Cyclical/Transportation, Energy, Financial, Industrial, Technology and Utilities.

While they represent portfolios of underlying stocks, shares of Select Sector SPDR funds trade like common stock. They are priced and traded continuously (between 9:30 A.M. and 4:15 P.M. EST) on the floor of the Amex. Holders of Select Sector SPDR fund shares are entitled to receive quarterly cash payments based upon dividends paid, less accrued expenses, if any, by the underlying stocks in each fund. Shares of Select Sector SPDR funds can be bought on margin or sold short.

Kathleen C. Cuocolo, senior vice president at State Street, said: “The outstanding success of these funds, which require highly sophisticated technology support, underscores two of State Street’s key competitive advantages — technology prowess and customer service. As an established leader in administration, accounting, custodial and investment management services, State Street is strongly positioned to support exchange-traded products such as SPDR funds. We are continuously seeking innovative strategic partners, such as Amex, who are as committed to bringing exchange-traded products to market as State Street.

SSgA, the investment management group of State Street Corporation, uses quantitative and traditional techniques to manage $582 billion in investment programs and portfolios for institutional and individual investors. In addition to Boston, SSgA has full investment operations in Hong Kong, Tokyo, London, Paris, Montreal, Munich and Sydney. It also has offices in Brussels, Dubai, Guangzhou, Milan, Moscow, Prague, Santiago, Toronto, Zurich, and Montpellier, France. In the United States, it has offices in Atlanta, Ga.; Chicago, Ill.; Clearwater, Fla.; Greenwich, Conn.; Hartford, Conn.; Jacksonville, Fla.; Manchester, N.H.; Minneapolis, Minn.; Naples, Fla.; Osterville, Mass.; Purchase, N.Y.; and San Francisco, Calif. For more information, visit SSgA’s web site at www.ssga.com.

With $5.3 trillion in assets under custody and $582 billion under management, State Street Corporation is the world’s leading specialist in serving institutional investors. Offices are located in the United States, Canada, Chile, Cayman Islands, Netherlands Antilles, Ireland, United Kingdom, Netherlands, France, Belgium, Luxembourg, Switzerland, Germany, Czech Republic, Austria, United Arab Emirates, Russia, People’s Republic of China, Taiwan, South Korea, Japan, Singapore, Australia, and New Zealand. State Street Corporation’s common stock is traded on the New York Stock Exchange under the symbol STT. For more information, visit State Street’s web site at www.statestreet.com.

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