FUND DESCRIPTION: SPDR Bloomberg Barclays Emerging Markets Local Bond ETF, formerly SPDR Barclays Emerging Markets Local Bond ETF, is an exchange-traded index fund or Index ETF which is a separate investment portfolio of the SPDR Series Trust, an investment management company. INVESTMENT OBJECTIVE: The SPDR Bloomberg Barclays Emerging Markets Local Bond ETF seeks to provide investment results that, before fees and expenses, correspond generally to the price and yield performance of the Bloomberg Barclays EM Local Currency Government Diversified Index, formerly Barclays EM Local Currency Government Diversified Index. INDEX DESCRIPTION: The Bloomberg Barclays EM Local Currency Government Diversified Index is designed to measure the performance of the fixed-rate local currency sovereign debt of emerging market countries. The Index includes government bonds issued by investment-grade countries outside the United States, in local currencies, that have a remaining maturity of one year or more and are rated B3/B-/B- or higher using the middle rating of Moody's Investor Service, Inc., Standard & Poor's, Inc. and Fitch Inc. Each of the component securities in the Index is a constituent of the Bloomberg Barclays EM Local Currency Government Index, screened such that the following countries are included: Brazil, Chile, Colombia, Czech Republic, Egypt, Hungary, Indonesia, Israel, Malaysia, Mexico, Peru, Philippines, Poland, Russia, South Africa, South Korea, Thailand and Turkey. As of December 31, 2010, there were approximately 365 securities in the Index and the modified adjusted duration of securities in the Index was approximately 4.39 years. The Index uses a modified market capitalization methodology. This design ensures that each constituent country within the Index is represented in a proportion consistent with its percentage with respect to the total market capitalization of the Index. Component securities in each constituent country are represented in a proportion consistent with their percentage relative to the other component securities in the constituent country. Under certain conditions, however, the par amount of a component security within the Index may be adjusted to conform to Internal Revenue Code requirements. FUND STRATEGY: In seeking to track the performance of the Index the Fund, employs a sampling strategy, which means that the Fund is not required to purchase all of the securities represented in the Index. Instead, the Fund may purchase a subset of the securities in the Index in an effort to hold a portfolio of securities with generally the same risk and return characteristics of the Index. The quantity of holdings in the Fund will be based on a number of factors, including asset size of the Fund. It is generally expected that the Fund will hold less than the total number of securities in the Index, but reserves the right to hold as many securities as it believes necessary to achieve the Fund's investment objective. Under normal market conditions, the Fund generally invests substantially all, but at least 80%, of its total assets in the securities comprising the Index or in securities that have economic characteristics that are substantially identical to the economic characteristics of the securities that comprise the Index. The Fund may invest in fixed-income securities that are not included in the Index, futures, options, swap contracts and other derivatives, cash and cash equivalents or money market instruments, such as repurchase agreements and money market funds. The Fund may also enter into forward currency exchange contracts for hedging and/or investment purposes. FUND MANAGEMENT: SSgA FM serves as the investment adviser to the Fund. SSGA LTD, an affiliate of the Adviser serves as investment sub-adviser to the Fund.
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