XLV Health Care Select Sector

Select Sector SPDRs, a family of exchange traded funds (ETFs) that divide the S&P 500 into nine individual sector funds, saw its collective assets under management increase 30.38% in 2006, for a total of $17,188,163,387 at 12/31/06. That represents an increase of $4.01 billion in total assets for the nine Select Sector SPDRs for the year, topping last year�s growth of $3.77 billion. �Clearly, Select Sector SPDRs have demonstrated their value in a diversified portfolio that seeks to target individual sectors of the U.S. equity market,� said Dan Dolan, Director � Wealth Management Strategies, Select Sector SPDR Trust. �Two thousand and six was another strong year for Select Sector SPDRs as professional and individual investors continued to discover the simplicity, cost efficiency and utility of building portfolios with ETFs. Increasingly, we are also seeing investors deploying sector ETFs instead of stocks in their investment strategy. This year we saw the Energy Sector SPDR trade an average of 23.1 million shares per day, surpassing even the largest energy company, Exxon Mobil, in trading volume.� Activity in Select Sector SPDR ETFs is often cited as a barometer of investor sentiment about the prospect of specific U.S. industries. In 2006, Consumer Staples, Utilities, and Consumer Discretionary Select Sector SPDRs saw the greatest increase in assets for the year, advancing 89.28%, 78.48%, and 65.43% respectively. Energy, Materials, and Health Care lagged, advancing 15.90%, 7.60%, 3.10% respectively. (See chart below for individual Select Sector SPDR 2006 asset flows) About Select Sector SPDRs Select Sector SPDRs are ETFs (Exchange Traded Funds) that divide the S&P 500 into nine sector index funds: Consumer Discretionary, Consumer Staples, Energy, Financials, Health Care, Industrials, Materials, Technology and Utilities. Select Sector SPDRs allow investors to customize their portfolios by picking and weighting the sectors to meet specific investment goals. Select Sector SPDR shares are actively traded on the American Stock Exchange throughout the trading day. SSgA Funds Management, Inc. serves as the Adviser to the Trust and, subject to the supervision of the Board of Trustees, is responsible for the investment management of the Select Sector SPDR Funds. For more information, see http://www.spdrindex.com. ALPS Distributors Inc., a registered broker-dealer, is the distributor for the Select Sector SPDR Trust. An investor should consider investment objectives, risks, charges, and expenses carefully before investing. To obtain a prospectus which contains this and other information, visit www.spdrindex.com/common/prospectus.pdf. Please read the prospectus carefully before investing. All ETFs are subject to risk, including possible loss of principal. Sector ETF products are also subject to sector risks and non-diversification risks, which may result in greater fluctuations than the overall stock market. The Select Sector SPDR is a trademark of the McGraw-Hill Companies, Inc. and has been licensed for use. The stocks included in each Select Sector Index were selected by the compilation agent. The composition and weighting of each Index can be expected to differ to that of any similar index that is published by Standard & Poor�s. Select Sector SPDRs bear a higher level of risk than more broadly diversified funds. SPDR Ticker Assets 12/31/05 Assets 12/31/06 Net Assets 2006 2006 % Change� Consumer Staples XLP $784.9 million $1.49 billion $700.80 million 89.28% Utilities XLU $1.68 billion $2.98 billion $1.30 billion 77.48% Consumer Discretionary XLY $396.7 million $656.30 million $259.57 million 65.43% Technology XLK $1.54 billion $2.02 billion $478.76 million 31.10% Financials XLF $1.87 billion $2.30 billion $430.14 million 23.00% Industrials XLI $886.2 million $1.07 billion $183.35 million 20.69% Energy XLE $3.28 billion $3.81 billion $522.34 million 15.90% Materials XLB $952.6 million $1.02 billion $72.36 million 7.60% Health Care XLV $1.79 billion $1.84 billion $5.54 million 3.10% Total � $ 13.18 billion $ 17.19 billion $ 4.01 billion 30.38%