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Maurice, An alternative to SPY would be SDY which is less than half the price and has about a 60% greater dividend... don't know about its probability of termination.
SPY is organized as a unit investment trust. So, it follows the rules of these trusts.
VOO is the Vanguard equivalent but this has relatively low volume because Vanguard was initially could not issue an S&P 500 ETF. I believe over time it will attract assets from SPY. An alternative would be VV or VTI.
Flack recommended SDY. If you are interested in Dividend ETF, than take a look at VIG as well.
"SPY is organized as a unit investment trust. So, it follows the rules of these trusts."
In particular, the rule against perpetuities. As this article suggests, the rule has been around since about 1680, though there's been a trend by states to do away with it.
The clause given in the SPY trust doesn't seem the least bit bizarre once one is familiar with this rule and the reasons behind it. Understanding the rule is another matter. Fortunately, the clause in the SPY trust is very straightforward. (No conditions - just 11 clearly and I assume unambiguously named people.)
But the way the rule can play out can give lawyers nightmares. I know a Constitutional law professor who just blew off the rule when she took the bar exam - too complicated in a subject she had no interest (property law). Me, I think it's fun, but I wouldn't want to get tested on it either.
Comments
An alternative to SPY would be SDY which is less than half the price and
has about a 60% greater dividend...
don't know about its probability of termination.
VOO is the Vanguard equivalent but this has relatively low volume because Vanguard was initially could not issue an S&P 500 ETF. I believe over time it will attract assets from SPY. An alternative would be VV or VTI.
Flack recommended SDY. If you are interested in Dividend ETF, than take a look at VIG as well.
In particular, the rule against perpetuities. As this article suggests, the rule has been around since about 1680, though there's been a trend by states to do away with it.
The clause given in the SPY trust doesn't seem the least bit bizarre once one is familiar with this rule and the reasons behind it. Understanding the rule is another matter. Fortunately, the clause in the SPY trust is very straightforward. (No conditions - just 11 clearly and I assume unambiguously named people.)
But the way the rule can play out can give lawyers nightmares. I know a Constitutional law professor who just blew off the rule when she took the bar exam - too complicated in a subject she had no interest (property law). Me, I think it's fun