ALPS Launches Equal Sector Weight ETF

newDENVER–ALPS is very pleased today to announce the launch of the first Equal Sector ETF, trading under the ticker symbol EQL. The Fund is an ETF of ETFs and will seek to track the performance of the Banc of America Securities – Merrill Lynch Equal Sector Weight Index by owning each of the nine Select Sector SPDR ETFs in equal weights1. The nine Select Sector SPDR ETFs will be rebalanced back to equal weight on a quarterly basis.

“Most equal-weight indexes are based at the stock level,” states ALPS Director of Product Research, Jeremy Held*. “EQL is an important extension of the equal-weight concept in that it addresses sector risk, which we consider to be a much more important and fundamental risk to client portfolios than individual stocks.

“Over the last 30 years the largest annual declines in the S&P 500 have been precipitated by a crash in the market’s largest sector. In 1981 it was Energy stocks. In 2000 it was Technology. Most recently in 2008 it was the Financial sector. An equal sector strategy minimizes the negative impact of any one sector by diversifying over multiple sectors. At the same time by offering meaningful exposure to each sector of the market, it allows investors the ability to participate in market rallies regardless of where they occur.”

While EQL will be the first equal sector ETF, the concept of equal sector investing is not a completely new one. “The Sector SPDR ETFs have been used by both financial advisors and institutional investors to create their own equal sector strategy for years. By offering this strategy in a packaged ETF solution we feel that the advantages of equal sector investing will now be available to a wider range of investors.”

EQL will be the second ETF sponsored by ALPS, who is well-known as a third-party distributor and asset servicing resource to the investment management industry. ALPS is also the sponsor of the Cohen & Steers Global Real Estate ETF (GRI), which was launched in May of 2008. Tom Carter, President of ALPS Advisors, noted that the launch of EQL is an important step for ALPS as it continues to expand its reach in the ETF business, “We are very pleased to be launching the first Equal Sector ETF and will continue to bring innovative solutions to the ETF industry that will help investors build better portfolios.”

For more information on EQL, call 866-675-2639 or visit www.alpsetfs.com.

About ALPS Holdings, Inc.

ALPS Holdings, Inc. is the parent company for ALPS Advisors, Inc., ALPS Distributors, Inc. and ALPS Fund Services, Inc., and is a Denver-based outsourcing solution for administration, compliance, creative services, fund accounting, legal, marketing, tax administration, transfer agency and shareholder services for open-end, closed-end, alternative investment and exchange-traded funds. ALPS has over $1 billion in client investment fund assets under management as of March 31, 2009. ALPS Distributors, Inc. provides distribution services to $171 billion in client assets as of June 19, 2009. For more information, visit www.alpsinc.com.

1 The Equal Sector Weight Strategy is represented by the nine Select Sector SPDR ETFs that are purchased individually, allocated equally, and rebalanced quarterly. As a result, each sector has an initial weighting of 11.1%. In this strategy, investors were responsible for rebalancing the portfolio quarterly. The expense ratio for each Select Sector SPDR is 0.21%. There are no sales loads on Select Sector SPDR shares but ordinary brokerage commissions do apply and this expense is not reflected in performance calculations. If such expenses were reflected, the performance shown would be lower.

* Registered Representative of ALPS Distributors, Inc.

Sector SPDR Performance

EQL is a new fund without performance history. The following table shows standardized performance for the underlying 9 Select Sector SPDR ETFs.

 

     

Total Returns (Net Asset Value) as of 3/31/09

   

Market Value Total Returns as of 3/31/09

 
          Annualized         Annualized  

Select Sector
SPDR Fund

 

   

One
Year

 

 

Five
Year

 

 

Ten
Year

 

   

One
Year

 

 

Five
Year

 

 

Ten
Year

 

 
Materials (XLB)     -43.31%   -0.99%   2.59%     -43.29%   -0.99%   2.62%  
Health Care (XLV)     -19.90%   -2.54%   -0.30%     -19.96%   -2.61%   -0.33%  
Cons Stap (XLP)     -22.55%   0.47%   -0.52%     -22.71%   0.41%   -0.52%  
Cons Disc (XLY)     -35.00%   -8.12%   -2.75%     -35.20%   -8.17%   -2.80%  
Energy (XLE)     -41.56%   9.16%   7.28%     -41.67%   9.10%   7.21%  
Financials (XLF)     -62.87%   -19.14%   -7.83%     -62.88%   -19.15%   -7.83%  
Industrials (XLI)     -48.63%   -5.15%   -1.34%     -48.59%   -5.24%   -1.39%  
Technology (XLK)     -29.57%   -3.87%   -7.53%     -29.64%   -3.91%   -7.54%  
Utilities (XLU)     -29.78%   4.50%   3.14%     -29.99%   4.38%   3.11%  

 

Performance data quoted represents past performance. Past performance does not guarantee future results. Current performance may be higher or lower than actual data quoted. Call 1-866-675-2639 or visit www.sectorspdrs.com for current month end performance.* Fund inception date 12/16/98. Market price returns are based on the midpoint of the bid/ask spread at 4 p.m. ET and do not represent the returns an investor would receive if shares were traded at other times. The above returns are for the underlying nine Select Sector SPDR ETFs and do not represent returns for EQL. While the expense ratio for the underlying Select Sector SPDR ETFs is 0.21%, EQL expense ratio is 0.55%.

An investor should consider investment objectives, risks, charges and expenses carefully before investing. To obtain a prospectus, which contains this and other information, call 1-866-675-2639 or visit www.alpsetfs.com. Read the prospectus carefully before investing.

Past performance is not indicative of future results.

The ALPS Equal Sector Weight ETF is the first ETF to use an equal-weight index methodology at the sector level, as opposed to apply equal weight to individual securities.

Diversification does not eliminate the risk of experiencing investment losses.

Sector ETF products are also subject to sector risk and non-diversification risk, which generally will result in greater price fluctuations than the overall market. An investment in the fund involves risks, including loss of principal.

The Fund’s investment performance, because it is a fund of funds, depends on the investment performance of the Underlying Sector ETFs in which it invests. An investment in the Fund is subject to the risks associated with the Underlying Sector ETFs that comprise the Underlying Index. The Fund will indirectly pay a proportional share of the asset-based fees of the Underlying Sector ETFs in which it invests.

The Fund has no operating history.

The Banc of America Securities – Merrill Lynch Equal Sector Weight Index is a U.S. equity index comprised, in equal weights, of nine sub-indices. These are the Consumer Discretionary Select Sector Index, Consumer Staples Select Sector Index, Materials Select Sector Index, Energy Select Sector Index, Technology Select Sector Index, Utilities Select Sector Index, Financial Select Sector Index, Industrial Select Sector Index and Health Care Select Sector Index. These nine indices, whose components add up to the components of the S&P 500, are modified capitalization weighted indices whose composition is defined by their GICS (Global Industry Classification System) code.

The S&P 500 Index is the Standard & Poor’s composite index of 500 stocks, a widely recognized, unmanaged index of common stock prices. You cannot invest directly in an index.

Basis Point: One hundredth of a percentage point (0.01%).

“Merrill Lynch” and references to the Banc of America Securities – Merrill Lynch Equal Sector Weight Index are printed with permission pursuant to a license agreement between Merrill Lynch and ALPS Distributors, Inc. (c) Copyright 2009 Merrill Lynch, Pierce, Fenner& Smith Incorporated (“Merrill Lynch”). All rights reserved. EQL is not sponsored, endorsed, or promoted by Merrill Lynch and/or its affiliates nor does Merrill Lynch and/or any of its affiliates provide investment advice to EQL. Merrill Lynch and/or its affiliates make no representation or warranties concerning the advisability of investing in, or performance of EQL or the accuracy, availability or completeness of the Index, Index values or Index related data and assumes no liability with respect to any of the forgoing.

ALPS Distributors, Inc., a registered broker-dealer, is distributor for the ALPS Equal Sector Weight ETF.

 

Contact:

ALPS Advisors, Inc.
Tom Carter*, 303-623-2577
President
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