Today, I discovered that the SPDR S&P 500 ETF Trust (NYSE: SPY) is structured differently from most other ETFs; it appears to be structured as a Unit Investment Trust (UIT). I know that UITs have a termination date, so I looked into SPY's prospectus and found this in the "Organization of the Trust" section (page 49):
The Trust has a specified lifetime term. The Trust is scheduled to terminate on the first to occur of (a) January 22, 2118 or (b) the date 20 years after the death of the last survivor of eleven persons named in the Trust Agreement, the oldest of whom was born in 1990 and the youngest of whom was born in 1993. [...]
- Why was SPY designed to terminate?
- Does it matter that SPY will eventually terminate? What implication does this structure of SPY have on regular investors? Is the structure advantageous or disadvantageous in any way, relative to other S&P 500 ETFs that have no termination date?
- Will SPY really disappear after 2118?