S&P FA Forum Presentation

SSgA Intermediary Business Group Strategy & Research

Investment Professional Use Only

Not to be Distributed to the Public

Table of Contents

• S&P Select Industry Index Methodology

• SPDR Industry ETF Offerings

• SPDR Sector and Industry ETF Leadership

• SPDR S&P Pharmaceuticals ETF vs. Pharmaceutical HOLDRS

• Q&A

S&P Select Industry Index Methodology

The S&P Select Industry Indices are designed to measure the performance of narrow Global Industry Classification Standard (GICS) sub-industries or groups of sub-industries.

– Membership is based on a company’s GICS classification, as well as liquidity and market cap requirements.

– The GICS structure consists of 10 sectors, 24 industry groups, 68 industries and 154 sub-industries.

– Companies are classified primarily based on revenues; however, earnings and market perception are also considered in classification analysis.

– The GICS sub-industry level offers the most granular and purest representation of a particular industry.

• Constituent stocks are members of the S&P Total Market Index – Each index aims to have a minimum of 35 stocks – Float-adjusted market capitalization should be at least US$ 400 million for index

inclusion. – U.S. companies only – All stocks are initially equal weighted, adjustments are then made to ensure

liquidity and concentration requirements (modified equal weight). Source S&P

SPDR Industry ETFs

Name Ticker Expense Ratio Assets* SPDR S&P Biotech XBI 0.35% $642.6 M

SPDR S&P Health Care Equipment XHE 0.35% $19.2 M

SPDR S&P Homebuilders XHB 0.35% $776.1 M

SPDR S&P Metals & Mining XME 0.35% $1,086.0 M

SPDR S&P Oil & Gas Equipment and Services XOP 0.35% $907.9 M

SPDR S&P Oil & Gas Exploration and Production XES 0.35% $489.4 M

SPDR S&P Transportation XTN 0.35% $15.9 M

SPDR S&P Telecommunications XTL 0.35% $10.3 M

SPDR S&P Pharmaceuticals XPH 0.35% $244.2 M

SPDR S&P Retail XRT 0.35% $569.5 M

SPDR S&P Semiconductors XSD 0.35% $114.8 M

SPDR Dow Jones REIT RWR 0.25% $1,557.0 M

SPDR KBW Bank KBE 0.35% $1,669.0 M

SPDR KBW Capital Markets KCE 0.35% $65.5 M

SPDR KBW Insurance KIE 0.35% $233.6 M

SPDR KBW Regional Banks KRE 0.35% $558.6 M

SPDR KBW Mortgage Finance KME 0.35% $3.8 M

Source: State Street Bank and Trust Co. as or 6/30/2011

SPDR Sector and Industry ETF Leadership

SPDR Sector and industry ETFs lead the industry in terms of assets and liquidity – More that 50.2% of sector and industry assets

• $46.2 billion in Select Sector SPDRs • $8.9 billion in more precise industry ETFs, many of which are equal weighted

– More than 70% of dollar volume and 80% of share volume

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

Assets Average 20-Day $ Volume Average 20-Day Share Volume

Perc

enta

ge o

f Tot

al S

ecto

r and

Indu

stry

ETF

s

SPDR Sector and Industry ETFs

iShares Sector and Industry ETFs

Vanguard Sector and Industry ETFs

Source: State Street Bank and Trust Co. as of 6/30/2011

SPDR S&P Pharmaceuticals ETF (XPH) vs. Pharmaceuticals HOLDRS (PPH)

Source: Bloomberg, FactSet, NYSE Arcavision, SSgA Strategy & Research, As of 5/31/2011. * as of 6/30/2011.

ETF Characteristic SPDR PHARMACEUTICALS

ETF Pharmaceutical

HOLDRS

Market Capitalization

Weighted Avg. 28,321 111,354

Sum 734,837 748,118

# of Securities 31 15

% in Top 10 Holdings 45.85 95.62

Dividend Yield 0.99 3.24

Price/Earnings 18.4 18.2

P/E using FY1 Est 12.7 11.4

Price/Cash Flow 20.2 12.1

Price/Book 5.1 2.8

Price/Sales 14.2 2.8

Top 10 Holdings Comparison

SPDR Pharmaceuticals ETF Pharmaceutical HOLDRS

As of 5/31/2011 As of 5/31/2011

U.S. Dollar U.S. Dollar

Percentage Weight Percentage Weight

VVUS VIVUS Inc. 5.60 JNJ Johnson & Johnson 24.19

MRX Medicis Pharmaceutical Corp. 4.65 PFE Pfizer Inc. 20.71

SLXP Salix Pharmaceuticals Ltd. 4.64 MRK Merck & Co Inc 15.28

QCOR Questcor Pharmaceuticals Inc. 4.55 ABT Abbott Laboratories 10.11

ENDP Endo Pharmaceuticals Holdings Inc. 4.49 BMY Bristol-Myers Squibb Co. 7.16

AGN Allergan Inc. 4.48 LLY Eli Lilly & Co. 5.32

WPI Watson Pharmaceuticals Inc. 4.38 MHS Medco Health Solutions Inc. 4.39

FRX Forest Laboratories Inc. 4.36 VRX Valeant Pharmaceuticals International Inc. 4.18

JNJ Johnson & Johnson 4.36 AGN Allergan Inc. 2.29

MRK Merck & Co Inc 4.34 FRX Forest Laboratories Inc. 1.99

10 Highest 45.85 10 Highest 95.62

Source: FactSet, as of 6/30/2011.

Questions?

For more information, contact: Fund_inquiry@ssga.com 866.787.2257 www.spdrs.com

ArcaVision Definitions

Intraday Volatility - Intraday Volatility is calculated by taking standard deviation of the trade price by stock. It is a volume weighted volatility measurement. (core trading session and across all exchanges).

Close - The closing price of the stock on the last day of the time period specified.

VWAP - The Volume Weighted Average Price of the stock over the specified time period. (core session and across all exchanges).

Range - The dollar amount of price fluctuation in the stock for the specified time period; highest prices subtracted from the lowest price. This value is volume weighted when calculated across multiple symbols. (core session and across al exchanges).

% Range - The ratio of price fluctuation in the stock price relative to the Volume Weighted Average Price for the time period specified. The higher the number, the larger the price swings in relation to the overall average price of the stock. This number is volume weighted and for core trading session.

Spread - The average dollar difference between the best bid and best offer across all exchanges for the specified time period, weighted by volume. (core trading session).

% Spread - Dollar spread divided by average spread across all exchanges for the specified time period, weighted by volume. (core trading session).

Bid Size - Size in shares of the quote on the bid side across all exchanges for the specified time period, weighted by VWAP. (core trading session).

Ask Size- Average size in shares of the quote on the ask side across all exchanges for the specified time period, weighted by VWAP. (core trading session).

Average Size - Average size in shares of bids and offers across all exchanges for the specified time period, weighted by VWAP. (core trading session).

Source: ArcaVision

Appendix A: Notes on Performance and Disclosure Statements For Investment Professional Use only – Not to Be Distributed to the Public

This material, prepared in response to your specific inquiry, was created using comparative information gathered and made available by Zephyr Associates, a global leader in the development of analytical software tools for the financial management industry. This analysis or any portion thereof may not be reprinted, sold or redistributed without the written consent of SSgA. This material was used to supplement an oral presentation and is not therefore a complete record of the discussion. This material has been created for informational purposes only and does not constitute investment advice and it should not be relied on as such. It does not take into account any investor’s particular investment objectives, strategies, tax status or investment horizon. There is no representation or warranty as to the current accuracy of, or liability for, decisions made based on this material. All material has been obtained from sources believed to be reliable, but its accuracy is not guaranteed.

Important Risk Information:

ETFs trade like stocks, are subject to investment risk, fluctuate in market value and may trade at prices above or below the ETFs net asset value. Brokerage commissions and ETF expenses will reduce returns.

Frequent trading of ETF’s could significantly increase commissions and other costs such that they may offset any savings from low fees or costs.

Because of their narrow focus, sector funds tend to be more volatile than funds that diversify across many sectors and companies.

Select Sector SPDR Funds bear a higher level of risk than more broadly diversified funds. All ETFs are subject to risk, including the possible loss of principal. Sector ETFs products are also subject to sector risk and non-diversification risk, which generally results in greater price fluctuations than the overall market.

Notes on Performance and Disclosure Statements Inception Dates: Inception Dates: SPDR S&P Biotech (02/06); SPDR S&P Semiconductor (02/06); SPDR S&P Pharmaceuticals (07/06); SPDR KBW Banking (07/06);Biotech HOLDRS (12/99); Pharmaceutical HOLDRS (02/00); Regional Bank HOLDRS (07/00); Semiconductor HOLDRS (06/00); Utilities Select Sector SPDR (01/99); Utilities HOLDRS (07/00); SPDR S&P Retail (07/06); Retail HOLDRS (06/01)

Performance information represents the historical gross performance of each manager or the performance of an unmanaged index. Performance figures include the reinvestment of dividends, interest and capital gains. Gross performance figures do not take into account investment management fees or transaction costs. Expenses that may include management fees and costs of transactions will reduce actual returns. If fees are deducted quarterly, the compounding effect will be to increase the impact of the fees by an amount directly related to the gross account performance. For example, on an account with a 2% annual fee, if the gross performance is 10%, the compounding effect of the fees will result in a net performance of approximately 7.81%. Past performance is no guarantee of future results. It is not possible to invest directly in an index. Index performance does not reflect charges and expenses associated with the fund or brokerage commissions associated with buying and selling exchange traded funds. Index performance is not meant to represent that of any particular mutual fund. "SPDR" is a registered trademark of Standard & Poor's Financial Services LLC ("S&P") and has been licensed for use by State Street Corporation. STANDARD & POOR’S, S&P, S&P 500 and S&P MIDCAP 400 are registered trademarks of Standard & Poor’s Financial Services LLC. No financial product offered by State Street Corporation or its affiliates is sponsored, endorsed, sold or promoted by S&P or its affiliates, and S&P and its affiliates make no representation, warranty or condition regarding the advisability of buying, selling or holding units/shares in such products. Further limitations and important information that could affect investors' rights are described in the prospectus for the applicable product. The trademarks and service marks referenced herein are the property of their respective owners. Third party data providers make no warranties or representations of any kind relating to the accuracy, completeness or timeliness of the data and have no liability for damages of any kind relating to the use of such data. State Street Global Markets, LLC, member FINRA, SIPC is distributor for all SPDRs products and SSgA Funds and is a wholly owned subsidiary of State Street Corporation. References to State Street may include State Street Corporation and its affiliates. ALPS Distributors, Inc., a registered broker-dealer, is distributor for SPDR shares, MidCap SPDRs and Dow Diamonds, all unit investment trusts and Select Sector SPDRs. Before investing, consider the funds’ investment objectives, risks, charges and expenses. To obtain a prospectus or summary prospectus which contains this and other information, call 1-866-787-2257 or visit www.spdrs.com. Read it carefully. SR-1571 Exp. Date 10/20/2011

Not FDIC Insured –No Bank Guarantee – May Lose Value