Business Wire, July 26, 2010
PowerShares Creating Investor Confusion with Adoption of ETF Ticker
Symbols that are Astoundingly Similar to those of Select Sector SPDRs
Misappropriation of Business Values is Key Issue of Select Sector
SPDRs Suit
NEW YORK — The Select Sector SPDR Trust, which offers a family of exchange-traded
funds (ETFs) that divide the S&P 500 into nine individual sector funds,
has filed suit against PowerShares Exchange-Traded Fund Trust II,
INVESCO PowerShares Capital Management, LLC, and INVESCO Distributors,
Inc. under Section 43 of the Federal Trademark Act, and common law of
the State of Texas.
At the core of Select Sector SPDRs complaint is PowerShares use of
ticker symbols for the nine sector ETFs it launched in April, which are
based on the S&P 600. These new symbols differ by just one letter, an
S appended to the end of the same symbols used since 1998 by Select
Sector SPDRs for precisely the same sectors.
This is a deliberate and unconscionable act on the part of PowerShares
to confuse both institutional and retail investors, said Dan Dolan,
Director of Wealth Management Strategies for the Select Sector SPDR
Trust. At a time when transparency in finance and investing has never
been more necessary or in demand by regulators, legislators, and the
investing public, PowerShares has succeeded in casting an unfortunate
shadow on Wall Streets efforts to eliminate financial opacity.
The Complaint notes that the Select Sector SPDR Trust has invested
substantial time, creative effort and millions of dollars developing an
association in the mind of investors between the particular symbols
under which the Trust’s ETFs are offered and the financial product the
symbol actually represents.
Dolan noted that the symbols of 101 out of 102 ETFs previously launched
by PowerShares start with P. The sector funds in question are the only
products in PowerShares ETF family that begin with an X, followed by
the same two letters as Select Sector SPDRs, with only an S appended
at the end, for example:
[Table Omitted]
Said Dolan: Theres no surprise, given our 12 years of intensive
advertising, public relations and marketing, that ETF investors
associate our symbols as representing a particular source and quality of
ETF product. Most importantly, each of our ETFs are known by their
particular XL-based ETF symbols more than they are known by their full
name, especially in the financial services and trading community.
About Select Sector SPDRs
Select Sector SPDRs are ETFs (Exchange Traded Funds) that divide the S&P
500 into nine sector index funds: Consumer Discretionary, Consumer
Staples, Energy, Financials, Health Care, Industrials, Materials,
Technology and Utilities. Select Sector SPDRs allow investors to
customize their portfolios by picking and weighting the sectors to meet
specific investment goals. Select Sector SPDR shares are actively traded
on NYSE Arca throughout the trading day. SSgA Funds Management, Inc.
serves as the Adviser to the Trust and, subject to the supervision of
the Board of Trustees, is responsible for the investment management of
the Select Sector SPDR Funds. For more information see http://sectorspdrs.com.
ALPS Distributors Inc., a registered broker-dealer, is the
distributor for the Select Sector SPDR Trust.
An investor should consider investment objectives, risks, charges,
and expenses carefully before investing. To obtain a Select
Sector SPDR prospectus which contains this and other information, visit www.sectorspdrs.com/prospectus/.
Please read the prospectus carefully before investing.
All ETFs are subject to risk, including possible loss of principal.
Sector ETF products are also subject to sector risks and
non-diversification risks, which will result in greater fluctuations
than the overall stock market.
The Select Sector SPDR is a trademark of the McGraw-Hill Companies, Inc.
and has been licensed for use. The stocks included in each Select Sector
Index were selected by the compilation agent
etf trading