Select Sector SPDR Trust N-CSRCertified annual shareholder report (management investment company)

The performance chart of a Fund’s total return at net asset value (“NAV”), the total return based on market price and its benchmark index is provided for comparative purposes only and represents the periods noted. A Fund’s per share NAV is the value of one share of a Fund and is calculated by dividing the value of total assets less total liabilities by the number of shares outstanding. The NAV return is based on the NAV of a Fund and the market return is based on the market price per share of a Fund. The market price used to calculate the market return is determined by using the midpoint between the highest bid and the lowest offer on the exchange on which the shares of a Fund are listed for trading, as of the time that a Fund’s NAV is calculated. NAV and market returns assume that dividends and capital gain distributions have been reinvested in a Fund at NAV. Market returns do not include brokerage commissions that may be payable on secondary market transactions. If brokerage commissions were included market returns would be lower.

An index is a statistical measure of a specified financial market or sector. An index does not actually hold a portfolio of securities and therefore does not reflect deductions for fees or expenses. In comparison, a Fund’s performance is negatively impacted by these deductions. Index returns reflect all items of income, gain and loss and the reinvestment of dividends and other income.

The Communication Services Select Sector Index includes companies that have been identified as Communication Services companies by the Global Industry Classification Standard (GICS^® ), including securities of companies from the following industries: diversified telecommunication services; wireless telecommunication services; media; entertainment; and interactive media & services.

The Consumer Discretionary Select Sector Index seeks to provide an effective representation of the consumer discretionary sector of the S&P 500 Index. The Index includes companies from the following industries: retail (specialty, multiline, internet and direct marketing); hotels, restaurants and leisure; textiles, apparel and luxury goods; household durables; automobiles; auto components; distributors; leisure products; and diversified consumer services.

The Consumer Staples Select Sector Index seeks to provide an effective representation of the consumer staple sector of the S&P 500 Index. The Index includes companies from the following industries: food and staples retailing; household products; food products; beverages; tobacco; and personal products.

The Energy Select Sector Index seeks to provide an effective representation of the energy sector of the S&P 500 Index. The Index includes companies from the following industries: oil, gas and consumable fuels; and energy equipment and services.

The Financials Select Sector Index seeks to provide an effective representation of the financial sector of the S&P 500 Index. The Index includes companies from the following industries: diversified financial services; insurance; banks; capital markets; mortgage real estate investment trusts ("REITs"); consumer finance; and thrifts and mortgage finance.

The Health Care Select Sector Index seeks to provide an effective representation of the health care sector of the S&P 500 Index. The Index includes companies from the following industries: pharmaceuticals; health care equipment and supplies; health care providers and services; biotechnology; life sciences tools and services; and health care technology.

The Industrials Select Sector Index seeks to provide an effective representation of the industrial sector of the S&P 500 Index. The Index includes companies from the following industries: aerospace and defense; industrial conglomerates; marine; transportation infrastructure; machinery; road and rail; air freight and logistics; commercial services and supplies; professional services; electrical equipment; construction and engineering; trading companies and distributors; airlines; and building products.

The Materials Select Sector Index seeks to provide an effective representation of the materials sector of the S&P 500 Index. The Index includes companies from the following industries: chemicals; metals and mining; paper and forest products; containers and packaging; and construction materials.

The Real Estate Select Sector Index seeks to provide an effective representation of the real estate sector of the S&P 500 Index. The Index includes companies from the following industries: real estate management and development and REITs, excluding mortgage REITs.

(The five largest holdings are subject to change, and there are no guarantees the Fund will continue to remain invested in any particular company.)

* The Fund’s industry breakdown is expressed as a percentage of total common stock and may change over time.

The Consumer Discretionary Select Sector SPDR Fund (the “Fund”) seeks to provide investment results that, before expenses, correspond generally to the price and yield performance of publicly traded equity securities of companies in the Consumer Discretionary Select Sector Index. The Fund’s benchmark is the Consumer Discretionary Select Sector Index (the “Index”).

For the 12-month period ended September 30, 2022 (the “Reporting Period”), the total return for the Fund was –20.06%, and the Index was –20.01%. The Fund and Index returns reflect the reinvestment of dividends and other income. The Fund’s performance reflects the expenses of managing the Fund, including brokerage and advisory expenses. The Index is unmanaged and Index returns do not reflect fees and expenses of any kind, which would have a negative impact on returns. Cash, security misweights, transaction costs and compounding (the exponential growth of outperformance or underperformance) also contributed to the difference between the Fund’s performance and that of the Index.

The Fund started out the Reporting Period with positive returns the last quarter of 2021. Consumer confidence in the U.S. improved in December, helping out year-end sales during the holiday season. Increased confidence also suggested economic growth momentum will continue in 2022 despite the persistent inflation.

During the last three quarters of the Reporting Period, Amazon shares rallied in February after the e-commerce giant surprised investors with a near doubling in profit over the holiday period, especially after warning of supply chain problems.  Shortly thereafter, Amazon announced a 20:1 stock split was slated for June 2022 along with a $10 billion stock repurchase plan. Travel and leisure groups started to regain some profitability in April following the major slump caused by the COVID-19 pandemic.  Profit outlook for automotive companies even started to slowly improve.

Unfortunately, positive momentum was seriously trumped by negative news from Tesla, the Fund’s second largest weighted name, in the second quarter of 2022, helping the overall Fund’s performance to fall over 25%. Tesla had a difficult few months, thanks to concerns over inflation and possible recession. In addition, the zero-tolerance COVID-19 lockdown measures in Beijing weighed on Tesla’s ongoing supply-chain problems and surging raw material costs. CEO Elon Musk’s high-profile Twitter takeover bid also added to concern that he would sell off holdings to pay for this potential acquisition. Finally, the Fund was able to manage a small positive uptick toward the end of the Reporting Period, as names like Dollar Tree and Dollar General surged after the discount variety store chains revealed better-than-expected profits.

On an individual security level, the top positive contributors to the Fund’s performance during the Reporting Period were Dollar General Corp., O’Reilly Automotive and Autozone, Inc. The top negative contributors to the Fund’s performance during the Reporting Period were Nike Inc. Class B, Tesla and Amazon.

(The five largest holdings are subject to change, and there are no guarantees the Fund will continue to remain invested in any particular company.)

* The Fund’s industry breakdown is expressed as a percentage of total common stock and may change over time.

The Consumer Staples Select Sector SPDR Fund (the “Fund”) seeks to provide investment results that, before expenses, correspond generally to the price and yield performance of publicly traded equity securities of companies in the Consumer Staples Select Sector Index. The Fund’s benchmark is the Consumer Staples Select Sector Index (the “Index”).

For the 12-month period ended September 30, 2022 (the “Reporting Period”), the total return for the Fund was –0.63%, and the Index was –0.49%. The Fund and Index returns reflect the reinvestment of dividends and other income. The Fund’s performance reflects the expenses of managing the Fund, including brokerage and advisory expenses. The Index is unmanaged and Index returns do not reflect fees and expenses of any kind, which would have a negative impact on returns. Expenses and cash contributed to the difference between the Fund’s performance and that of the Index.

The Reporting Period was a volatile period for the securities markets as significantly heightened geopolitical issues, lingering and growing higher inflation readings, dramatic increases in the Federal Funds rate and declining consumer sentiment surveys collectively impacted market returns. The Consumer Staples Sector (the “Sector”) did relatively well in this environment posting a very modest decline. This Sector was helped by its relatively defensive nature as though consumers may delay some discretionary purchases the nature of this segment generally precludes appreciably delaying purchases. Slight easing of supply chains also helped this sector with continuing expectations of further improvements on the input side. In a reversal from the prior period, firms who’s business model involved supplying restaurants were helped by a more mobile consumer as the impacts from COVID-19 modestly waned in terms of foot traffic. In general, the firms that have pricing power and can pass on higher input costs to the end consumers were the best performing stocks within this sector during this Reporting Period. The markets “risk off” mindset during the last two quarters of the Reporting Period also contributed to this fund’s returns.

On an individual security level, the top positive contributors to the Fund’s performance during the Reporting Period were Coca-Cola Company, General Mills, Inc. and PepsiCo, Inc. The top negative contributors to the Fund’s performance during the Reporting Period were Procter & Gamble Company, Walgreens Boots Alliance, Inc. and Estee Lauder Companies Inc. Class A.

(The five largest holdings are subject to change, and there are no guarantees the Fund will continue to remain invested in any particular company.)

* The Fund’s industry breakdown is expressed as a percentage of total common stock and may change over time.

The Energy Select Sector SPDR Fund (the “Fund”) seeks to provide investment results that, before expenses, correspond generally to the price and yield performance of publicly traded equity securities of companies in the Energy Select Sector Index. The Fund’s benchmark is the Energy Select Sector Index (the “Index”).

For the 12-month period ended September 30, 2022 (the “Reporting Period”), the total return for the Fund was 44.34%, and the Index was 44.49%. The Fund and Index returns reflect the reinvestment of dividends and other income. The Fund’s performance reflects the expenses of managing the Fund, including brokerage and advisory expenses. The Index is unmanaged and Index returns do not reflect fees and expenses of any kind, which would have a negative impact on returns. Cumulative security misweights between the Fund and the Index and Fund expenses contributed to the difference between the Fund’s performance and that of the Index.

The energy sector proved to be the strongest sector over the last 12 months far outpacing Utilities as the only other positive performing sector which returned over 5%. Much of the strong performance in energy can be attributed to general inflation, higher oil prices, and the Russia-Ukraine war that exacerbated supply chain and inflation problems.

Within the last 12 months, the U.S. Federal Reserve took a more hawkish turn and began fighting inflation with its first rate hikes since 2018. Inflation has remained persistent as the U.S. Federal Reserve continues to raise interest rates. With gas prices peaking in the middle of the summer months, the U.S. government released oil reserves helping to relieve pressure and reduce gas price.

On an individual security level, the top positive contributors to the Fund’s performance during the Reporting Period were Occidental Petroleum Corporation, Exxon Mobil Corporation, and Chevron Corporation. The top negative contributors to the Fund’s performance during the Reporting Period were E-mini SP 500 Energy (CME) Dec 21, E-mini SP 500 Energy (CME) Jun 22 and Baker Hughes Company Class A.

(The five largest holdings are subject to change, and there are no guarantees the Fund will continue to remain invested in any particular company.)

* The Fund’s industry breakdown is expressed as a percentage of total common stock and may change over time.

The Financial Select Sector SPDR Fund (the “Fund”) seeks to provide investment results that, before expenses, correspond generally to the price and yield performance of publicly traded equity securities of companies in the Financial Select Sector Index. The Fund’s benchmark is the Financial Select Sector Index (the “Index”).

For the 12-month period ended September 30, 2022 (the “Reporting Period”), the total return for the Fund was –17.67%, and the Index was –17.65%. The Fund and Index returns reflect the reinvestment of dividends and other income. The Fund’s performance reflects the expenses of managing the Fund, including brokerage and advisory expenses. The Index is unmanaged and Index returns do not reflect fees and expenses of any kind, which would have a negative impact on returns. Expenses and cash contributed to the difference between the Fund’s performance and that of the Index.

There were a number of factors that contributed to this Fund’s decline during the Reporting Period. The combination of declining loan growth and an inverted yield curve raised significant worries regarding potential revenue challenges for the banking segment. Additionally, this sector continued to be impacted by a heightened regulatory environment with a particular focus on ESG and lending standards. As markets declined during the Reporting Period, revenue concerns increased for the firms with an asset management business focus. Along with declining markets, recession concerns rose significantly bringing with it worries regarding an uptick of bad debt being on balance sheets although by many measures firms and consumers were better positioned relative to other sizable market down turns. Rising interest rates were not a negative for all constituents as there were expectations that insurance companies would be better positioned in regard to revenue and investment returns.

On an individual security level, the top positive contributors to the Fund’s performance during the Reporting Period were Progressive Corporation, Arthur J. Gallagher & Co. and M&T Bank Corporation. The top negative contributors to the Fund’s performance during the Reporting Period were JPMorgan Chase & Co., Bank of America Corp. and Citigroup Inc.

(The five largest holdings are subject to change, and there are no guarantees the Fund will continue to remain invested in any particular company.)

* The Fund’s industry breakdown is expressed as a percentage of total common stock and may change over time.

The Health Care Select Sector SPDR Fund (the “Fund”) seeks to provide investment results that, before expenses, correspond generally to the price and yield performance of publicly traded equity securities of companies in the Health Care Select Sector Index. The Fund’s benchmark is the Health Care Select Sector Index (the “Index”).

For the 12-month period ended September 30, 2022 (the “Reporting Period”), the total return for the Fund was –3.47%, and the Index was –3.37%. The Fund and Index returns reflect the reinvestment of dividends and other income. The Fund’s performance reflects the expenses of managing the Fund, including brokerage and advisory expenses. The Index is unmanaged and Index returns do not reflect fees and expenses of any kind, which would have a negative impact on returns. Expenses and cash contributed to the difference between the Fund’s performance and that of the Index.

The COVID-19 pandemic and the policy and medical response to it continued to have an appreciable impact on many of the constituents of this Fund during the Reporting Period. This was most notably manifested on the demand side as the medical community continues to work down the backlog of deferred medical procedures. Additionally, market expectations are for a much higher run rate of government spending on healthcare and research than the historical norm. This change was heavily influenced by the pandemic and the responses to the pandemic. Another positive for this sector was a decline in regulatory concerns during the Reporting Period. Also, secular trends such as the continuing increased health care demands associated with the ongoing aging of the American population continue to make a positive contribution to many of this Fund’s constituents. This demographic trend is anticipated to lead to continued strong growth in the medical products, pharmaceuticals and medical services markets. Additionally, the return for many of the constituents of this Fund were helped by the sector’s continued dramatic innovation success as evidenced by a much quicker than anticipated response to the COVID-19 pandemic. This spirit and success at innovation has positively contributed to the Fund in the past and breakthroughs associated with the recent pandemic response are expected to contribute to returns in the future. Finally though slower than recent periods, mergers and acquisitions both completed and anticipated contributed to this Fund’s return.

On an individual security level, the top positive contributors to the Fund’s performance during the Reporting Period were AbbVie, Inc., UnitedHealth Group Incorporated and Eli Lilly and Company. The top negative contributors to the Fund’s performance during the Reporting Period were Moderna, Inc., Intuitive Surgical, Inc. and Medtronic Plc.

(The five largest holdings are subject to change, and there are no guarantees the Fund will continue to remain invested in any particular company.)

* The Fund’s industry breakdown is expressed as a percentage of total common stock and may change over time.

The Industrial Select Sector SPDR Fund (the “Fund”) seeks to provide investment results that, before expenses, correspond generally to the price and yield performance of publicly traded equity securities of companies in the Industrial Select Sector Index. The Fund’s benchmark is the Industrial Select Sector Index (the “Index”).

For the 12-month period ended September 30, 2022 (the “Reporting Period”), the total return for the Fund was –13.95%, and the Index was –13.87%. The Fund and Index returns reflect the reinvestment of dividends and other income. The Fund’s performance reflects the expenses of managing the Fund, including brokerage and advisory expenses. The Index is unmanaged and Index returns do not reflect fees and expenses of any kind, which would have a negative impact on returns. Fees and expenses contributed to the difference between the Fund’s performance and that of the Index.

After a promising first fiscal quarter (+8.6%), the Index retreated for the rest of the Reporting Period leading to an overall loss of 13.95% for the fiscal year and giving back much of the previous fiscal year’s 29% gain. The good times early in the Reporting Period led by humanity’s re-emergence from the COVID-19 pandemic gave way to conflict, global inflation, and supply chain shortcomings that were primary drivers of Fund’s performance during the Reporting Period. The slide started as the calendar turned to 2022. Investor sentiment was weighed down by concerns around the Russia-Ukraine war and the tightening stance adopted by the U.S. Federal Reserve in the wake of surging inflation. The third fiscal quarter was the primary source for the overall return losing 14.8% alone during that three month stretch. During that quarter, energy and commodity prices were pushed to extreme levels as a result of the war and the trickle effect of higher fuel prices led to increased supply chain disruptions.

On an individual security level, the top positive contributors to the Fund’s performance during the Reporting Period were Waste Management, Inc., Northrop Grumman Corp. and Lockheed Martin Corporation. The top negative contributors to the Fund’s performance during the Reporting Period were 3M Company, Boeing Company and General Electric Company.

(The five largest holdings are subject to change, and there are no guarantees the Fund will continue to remain invested in any particular company.)

* The Fund’s industry breakdown is expressed as a percentage of total common stock and may change over time.

The Materials Select Sector SPDR Fund (the “Fund”) seeks to provide investment results that, before expenses, correspond generally to the price and yield performance of publicly traded equity securities of companies in the Materials Select Sector Index. The Fund’s benchmark is the Materials Select Sector Index (the “Index”).

For the 12-month period ended September 30, 2022 (the “Reporting Period”), the total return for the Fund was –12.23%, and the Index was –12.15%. The Fund and Index returns reflect the reinvestment of dividends and other income. The Fund’s performance reflects the expenses of managing the Fund, including brokerage and advisory expenses. The Index is unmanaged and Index returns do not reflect fees and expenses of any kind, which would have a negative impact on returns. Cumulative security misweights between the Fund and the Index and Fund expenses contributed to the difference between the Fund’s performance and that of the Index.

Global economic activity continued to expand in the fourth quarter of 2021, albeit at a measurably moderate pace, with several factors contributing to multiple headwinds. Supply chain bottlenecks continued to persist and sapped growth momentum during the quarter. Rising COVID-19 cases toward the end of the quarter triggered disruption to services and created further bottlenecks related to labor, transportation and goods. Key central banks across regions pivoted to a hawkish stance amid persistent high inflation, thereby increasing the risk to growth momentum in early 2022.

On the fiscal front, the U.S. Congress passed a bipartisan infrastructure bill, whereas the more ambitious “build back better” spending bill did not find enough support in the Senate. On the monetary policy front, global central banks, led by the U.S. Federal Reserve, turned mostly hawkish by varying degrees. The U.S. Federal Reserve abandoned its notion of ‘transitory inflation’, as inflation is now expected to persist longer than expected and announced that it would double the pace of tapering, paving the way for a rate hike in early 2022. With fiscal stimulus in place, this proved to be the only quarter for the Reporting Period where the Fund generated positive returns. During this quarter, the Fund was up 15.1%.

Global economic growth and equity markets faced multiple headwinds in the first quarter of 2022. Commodity prices accelerated the trend as western countries imposed strict sanctions on Russia’s economy. Hawkish pivot by western central banks amid rising inflation also weighed on stocks and bonds. The Russia-Ukraine war further exacerbated the supply chain and inflation problems at the end of February.

On the monetary policy front, the major central banks adopted a more hawkish tone in the quarter amid stubbornly high inflation. The U.S. Federal Reserve delivered its first rate hike since 2018 but surprised the markets, signaling a much more hawkish pivot with expectations of six further 25 bp hikes this year. With the back drop of rising inflation and continued supply disruptions and the Fund dropped –2.4% for the quarter.

Persistent inflation pressure forced central banks to accelerate tightening, risking a hard landing. Incoming data from key developed markets pointed toward broad-based deceleration in economic activities. However, China’s rebound helped soften the pace of the global slowdown. Geopolitical risks remained elevated amid the ongoing Russia-Ukraine war and continued escalations between the United States (U.S.) and China over Taiwan.

Markets remained volatile in the second quarter of 2022 and equities and bonds posted sharp declines. Concerns over persistent inflation, hawkish central bank actions and the ongoing Russia-Ukraine war weighed heavily on sentiment. Combined, this help drive performance down for the quarter. The Fund returned –15.9% during this quarter.

Global markets declined and growth stumbled in the third quarter of 2022 as inflation remained persistently high, geopolitical tensions escalated, and central banks raised aggressively, signaling larger-than-expected future hikes. After the Fund rallied early in the quarter, risk assets declined in August and September as central banks struggled with inflation amid slowing economic growth. This again weighed on performance for the Fund. For the quarter, the Fund returned –7.1%.

(The five largest holdings are subject to change, and there are no guarantees the Fund will continue to remain invested in any particular company.)

* The Fund’s industry breakdown is expressed as a percentage of total common stock and may change over time.

The Real Estate Select Sector SPDR Fund (the “Fund”) seeks to provide investment results that, before expenses, correspond generally to the price and yield performance of publicly traded equity securities of companies in the Real Estate Select Sector Index. The Fund’s benchmark is the Real Estate Select Sector Index (the “Index”).

For the 12-month period ended September 30, 2022 (the “Reporting Period”), the total return for the Fund was –16.46%, and the Index was –16.37%. The Fund and Index returns reflect the reinvestment of dividends and other income. The Fund’s performance reflects the expenses of managing the Fund, including brokerage and advisory expenses. The Index is unmanaged and Index returns do not reflect fees and expenses of any kind, which would have a negative impact on returns. Fees contributed to the difference between the Fund’s performance and that of the Index.

Fueled by the expansion of global activity, the real estate sector advanced nearly 17% over the first quarter of the Reporting Period and was the top performing sector in the S&P 500 Index. At the start of 2022 however, the sector along with the rest of the equity markets began to face multiple headwinds, rising COVID-19 cases, supply chain bottlenecks that sapped growth momentum and the pivot to a hawkish stance by key central banks. Amid persistent high inflation, central banks raised interest rates aggressively. Signs of higher interest rates weighed on the housing market – home prices were observed to be 40% higher compared with the start of 2020 and the number of home sales declined as 30-year mortgage rates topped 6%. These headwinds weighed on the real estate sector and the Fund declined over 30% over the last three quarters of the Reporting Period.

All sub-industries posted negative returns over the Reporting Period. Within the Specialized REITs sub-industry, self-storage REITs tend to have low economic sensitivity and performed well as demand remained strong. The Real Estate Services sub-industry performed the worst. After observing strong growth over the prior year, the stock price of CBRE Group showed weakness from the headwinds and declined over 30%.

On an individual security level, the top positive contributors to the Fund’s performance during the Reporting Period were Public Storage, Extra Space Storage Inc. and Duke Realty Corporation. The top negative contributors to the Fund’s performance during the Reporting Period were Prologis, Inc., Equinix, Inc. and American Tower Corporation.

(The five largest holdings are subject to change, and there are no guarantees the Fund will continue to remain invested in any particular company.)

* The Fund’s industry breakdown is expressed as a percentage of total common stock and may change over time.

The Technology Select Sector SPDR Fund (the “Fund”) seeks to provide investment results that, before expenses, correspond generally to the price and yield performance of publicly traded equity securities of companies in the Technology Select Sector Index. The Fund’s benchmark is the Technology Select Sector Index (the “Index”).

For the 12-month period ended September 30, 2022 (the “Reporting Period”), the total return for the Fund was –19.82%, and the Index was –19.73%. The Fund and Index returns reflect the reinvestment of dividends and other income. The Fund’s performance reflects the expenses of managing the Fund, including brokerage and advisory expenses. The Index is unmanaged and Index returns do not reflect fees and expenses of any kind, which would have a negative impact on returns. Management fees, cash drag, and cumulative effects of individual security misweights contributed to the difference between the Fund’s performance and that of the Index.

The Fund had positive performance in one of the four quarters of the Reporting Period. Performance in the first quarter of the Reporting Period was positive due to the signing of the $1.2 trillion bipartisan Infrastructure Investment and Jobs Act, strong earnings growth, and progress in the fight against COVID-19 despite the emergence of the highly infectious Omicron variant. Performance in the last three quarters of the Reporting Period was negative on the back of rising inflation, tighter monetary policy, declining consumer sentiment, ongoing supply chain issues, the Russia-Ukraine war and recessionary fears despite lower levels of unemployment and positive earnings were primary drivers of the Fund’s overall performance during the Reporting Period.

On an individual security level, the top positive contributors to the Fund’s performance during the Reporting Period were Xilinx, Inc., Automatic Data Processing, Inc. and Enphase Energy, Inc. The top negative contributors to the Fund’s performance during the Reporting Period were PayPal Holdings, Inc. and Microsoft Corporation and Apple Inc.

(The five largest holdings are subject to change, and there are no guarantees the Fund will continue to remain invested in any particular company.)

* The Fund’s industry breakdown is expressed as a percentage of total common stock and may change over time.

The Utilities Select Sector SPDR Fund (the “Fund”) seeks to provide investment results that, before expenses, correspond generally to the price and yield performance of publicly traded equity securities of companies in the Utilities Select Sector Index. The Fund’s benchmark is the Utilities Select Sector Index (the “Index”).

For the 12-month period ended September 30, 2022 (the “Reporting Period”), the total return for the Fund was 5.46%, and the Index was 5.58%. The Fund and Index returns reflect the reinvestment of dividends and other income. The Fund’s performance reflects the expenses of managing the Fund, including brokerage and advisory expenses. The Index is unmanaged and Index returns do not reflect fees and expenses of any kind, which would have a negative impact on returns. Expenses and cash contributed to the difference between the Fund’s performance and that of the Index.

Despite a challenging market environment especially during the last two quarters of the Reporting Period, this Fund was still able to generate a positive return. One factor that positively contributed to this Fund’s return was a pickup in electricity demand owing to both more extreme weather conditions and a continued uptick in activity as the COVID-19 pandemic’s impact waned appreciably during the Reporting Period. Another positive contributing factor was the government’s continued support for green energy initiatives. This Fund’s returns were also buoyed by a general “risk off” market environment as investors seemed to appreciate the relative defensive nature of this sector. The last two quarters have been marked by increased investor appetite for funds with comparatively higher dividend yields which has helped this Fund as the Utilities Sector has historically from a sector perspective had one of the higher dividend yields. This Reporting Period saw dramatic increases in the Federal Funds rate which has typically hurt this Fund but in this case the relative predictability of the constituents’ businesses has over shadowed profitability concerns associated with higher interest rates. There’s also an expectation that higher input costs can be passed on to the end users in the current inflationary environment.

On an individual security level, the top positive contributors to the Fund’s performance during the Reporting Period were Exelon Corporation, Sempra Energy, and Southern Company. The top negative contributors to the Fund’s performance during the Reporting Period were Public Service Enterprise Group Inc, American Water Works Company, Inc. and PPL Corporation.

(The five largest holdings are subject to change, and there are no guarantees the Fund will continue to remain invested in any particular company.)

* The Fund’s industry breakdown is expressed as a percentage of total common stock and may change over time.