State Street Equity 500 Index Fund - Class K: A Comprehensive Overview

Are you seeking a diversified investment option that tracks the performance of the broad U.S. stock market? Consider the State Street Equity 500 Index Fund - Class K (ticker: SWPPX). This index fund offers investors a cost-effective and convenient way to gain exposure to the top 500 companies in the United States.

Key Features of SWPPX

• Objective: To provide investment results that correspond to the performance of the S&P 500 Index.
• Benchmark: S&P 500 Index
• Fund Type: Open-end index fund
• Inception Date: September 22, 1993
• Expense Ratio: 0.02% (as of July 2023)
• Minimum Investment: $1,000
• Share Class: Class K shares are available for purchase through financial advisors and certain brokerage platforms.

Investment Strategy

SWPPX invests primarily in a portfolio of common stocks that constitute the S&P 500 Index. The fund's holdings represent a cross-section of industries and sectors found in the U.S. equity market. The fund manager employs a passive investment strategy, which means it seeks to track the benchmark index as closely as possible, rather than actively make investment decisions.

Performance and Returns

SWPPX has a long history of delivering consistent returns to investors. Over the past five years, the fund has generated an average annualized return of 10.78% (as of July 2023). This performance closely aligns with the 10.65% annualized return of the S&P 500 Index over the same period.

Suitability for Investors

SWPPX is a suitable investment option for a wide range of investors, including:

• Individual investors seeking a diversified exposure to the U.S. stock market.
• Long-term investors with a moderate risk tolerance.
• Financial advisors seeking a low-cost and efficient way to allocate client assets to large-cap U.S. stocks.

Advantages of Investing in SWPPX

• Low Expense Ratio: SWPPX has one of the lowest expense ratios among index funds tracking the S&P 500 Index.
• Diversification: The fund's holdings include a broad range of companies across various industries and sectors, reducing the concentration of any one investment.
• Tax Efficiency: SWPPX is structured as an exchange-traded fund (ETF), which means it can be bought and sold throughout the trading day, potentially offering tax advantages for investors.
• Long Track Record: The fund has been in operation for over three decades, providing investors with a proven history of performance.

Considerations for Investors

Before investing in SWPPX, potential investors should consider the following:

• Market Risk: The fund's performance is directly linked to the performance of the S&P 500 Index. As the broader stock market experiences volatility, the fund's value may fluctuate.
• Correlation with the Market: The fund's passive investment strategy means it will closely track the performance of the S&P 500 Index. Investors seeking a more active investment strategy should consider other options.
• Expense Considerations: While SWPPX has a low expense ratio, investors should still consider the overall impact of fees and expenses on their investment returns.

How to Invest in SWPPX

Investors can purchase Class K shares of SWPPX through financial advisors or brokerage platforms that offer the fund. The minimum investment for Class K shares is $1,000.

Alternatives to SWPPX

Investors seeking alternative index funds tracking the S&P 500 Index may consider the following:

• Vanguard S&P 500 ETF (VOO): Expense ratio of 0.03%
• iShares Core S&P 500 ETF (IVV): Expense ratio of 0.04%
• SPDR S&P 500 ETF Trust (SPY): Expense ratio of 0.0945%

Conclusion

The State Street Equity 500 Index Fund - Class K (SWPPX) is a low-cost, diversified index fund that provides investors with a convenient way to gain exposure to the top 500 companies in the United States. The fund's long history of performance and passive investment strategy make it a suitable option for investors seeking a broad and cost-effective investment solution.

Frequently Asked Questions

• Q: What is the difference between Class K and other share classes of SWPPX?
  A: Class K shares are available for purchase through financial advisors and certain brokerage platforms. Other share classes, such as Institutional shares, may have different expense ratios and minimum investment requirements.
• Q: Is SWPPX actively managed?
  A: No, SWPPX is not actively managed. The fund manager passively tracks the performance of the S&P 500 Index.
• Q: Does SWPPX pay dividends?
  A: Yes, SWPPX pays dividends on a quarterly basis. The dividend yield varies depending on market conditions.

Tables

| Table 1: SWPPX Historical Performance |
|---|---|
| Time Period | Annualized Return |
|---|---|
| 1 Year | 2.78% |
| 3 Years | 9.87% |
| 5 Years | 10.78% |
| 10 Years | 6.52% |

| Table 2: SWPPX Portfolio Holdings |
|---|---|
| Sector | Weight |
|---|---|
| Information Technology | 28.10% |
| Health Care | 13.30% |
| Financials | 12.20% |
| Consumer Discretionary | 11.50% |
| Industrial | 9.60% |

| Table 3: SWPPX Fund Fees |
|---|---|
| Expense Ratio | 0.02% |
| Management Fee | Included in expense ratio |
| Custodian Fee | Included in expense ratio |

| Table 4: SWPPX Tax Considerations |
|---|---|
| Tax Status | Exchange-traded fund (ETF) |
| Dividend Treatment | Dividends qualified for favorable tax treatment (may be taxed as long-term capital gains) |
| Capital Gains Treatment | Capital gains may be taxed as long-term capital gains (after holding for more than one year) |