FUND DESCRIPTION: SPDR S&P International Small Cap ETF is an exchange-traded index fund or Index ETF which is a separate investment portfolio of the SPDR Index Shares Fund, an investment management company. INVESTMENT OBJECTIVE: The SPDR S&P International Small Cap ETF, before fees and expenses, seeks to closely match the returns and characteristics of the total return performance of the S&P Developed Ex-U.S. Under USD2 Billion Index. INDEX DESCRIPTION: The S&P Developed Ex-U.S. Under USD2 Billion Index is a market capitalization weighted index designed to define and measure the investable universe of publicly traded small-cap companies domiciled in developed countries outside the United States. The Index component securities are a subset, based on market capitalization and region, of component securities included in the S&P BMI Global Equity
Index. The Global Equity Index is a comprehensive, float-weighted, rules-based benchmark that is readily divisible and customizable. A country will be eligible for inclusion in the Global Equity Index if it has a float-adjusted market capitalization of $1 billion or more and its market capitalization constitutes at least 40 basis points in either a developed or emerging market. All publicly listed companies with float-adjusted market capitalization of a minimum of $100 million and at least $50 million annual trading volume are included for each country. All stocks are weighted proportionate to their float-adjusted market capitalization and the Index is rebalanced annually. The Index is float adjusted, meaning that only those shares publicly available to investors are included in the Index calculation. Each individual stock is capped at a maximum of 24% of index weight and changes in capping are monitored on the quarterly rebalancing dates. To be included in the Index, a publicly listed company must have a total market capitalization between $100 million and $2 billion, and be located in a country that meets the BMI Developed World Series criteria. Countries covered in the Index have historically included, among others, Austria, Belgium, Denmark, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, the United Kingdom, Australia, Hong Kong, Japan, New Zealand, Singapore, South Korea and Canada. As of December 31, 2009, the Index was comprised of 3,114 securities. FUND STRATEGY: Under normal market conditions, the Fund generally invests substantially all, but at least 90%, of its total assets in the securities comprising the Index. In addition, the Fund may invest in 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 uses a passive management, indexing investment approach, and sampling methodology designed to track the total return performance of the Index. The Fund does not intend to purchase all of the securities in the Index, but rather will utilize a sampling methodology in seeking the Fund's objective by purchasing 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. The Fund reserves the right to hold as many securities as it believes necessary to achieve the Fund's investment objective. FUND MANAGEMENT: SSgA FM serves as the investment adviser to the Fund, subject to the supervision of the Board, is responsible for the investment management of the Fund.
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