New ETFs Launched by State Street, by Tom Lydon

State Street Global Advisors, or SSgA, just added three sector SPDRs to its lineup. The Biotech SPDR (XBI), Homebuilders SPDR (XHB) and Semiconductor SPDR (XSD) are trading on the American Stock Exchange.

American Stock Exchange Press Release

The SPDR Homebuilders ETF seeks to replicate as closely as possible, before expenses, the performance of an index derived from the homebuilding segment of a U.S. total market composite index. The Fund uses a passive management strategy designed to track the total return performance of the S&P Homebuilders Select Industry Index (the “Homebuilders Index” or the “Index”). The Homebuilders Index represents the homebuilding sub-industry portion of the S&P Total Market Index.

I don’t really see the need for another Biotech or Semiconductor ETF, but the Homebuilders SPDR (XHB) interests me. I’ll keep an eye on all of them to see how liquid they become. With ETF launches, clearly the first mover has the advantage. Just compare the liquidity of the streetTRACKS Gold Shares (GLD) with the iShares COMEX Gold Trust (IAU).

I don’t have a chart of the S&P Homebuilders Select Industry Index, but I do have one for the Philadelphia Stock Exchange’s Housing Index (HGX). There might be a “head and shoulders top” shaping up, so the XHB will be a handy way to get short once price breaks below the “neckline.”

– via TraderMike –