N-30D 1 a09-31664_2n30d.htm N-30D

STANDARD AND POOR'S MIDCAP 400 DEPOSITARY RECEIPTSTM

("MIDCAP SPDRS")

MIDCAP SPDR TRUST, SERIES 1

A UNIT INVESTMENT TRUST

ANNUAL REPORT

SEPTEMBER 30, 2009

"Standard & Poor's®", "S&P®", "Standard & Poor's MidCap 400 IndexTM", "S&P MidCap 400 IndexTM", "Standard & Poor's MidCap 400 Depositary Receipts" and "MidCap SPDRs" are trademarks of The McGraw-Hill Companies, Inc. State Street Global Markets, LLC is permitted to use these trademarks pursuant to a "License Agreement" with Standard & Poor's, a division of The McGraw-Hill Companies, Inc. and MidCap SPDR Trust, Series 1, is permitted to use these trademarks pursuant to a sublicense from State Street Global Markets, LLC. MidCap SPDR Trust, Series 1, is not, however, sponsored by or affiliated with Standard & Poor's or The McGraw-Hill Companies, Inc.



MidCap SPDR Trust, Series 1
Trust Overview
September 30, 2009

OBJECTIVE:

To replicate the total return of the S&P MidCap 400 IndexTM.

STRATEGY:

The MidCap SPDR Trust, Series 1 (the "Trust") holdings are comprised of the 400 stocks in the S&P MidCap 400 Index, which is designed to capture the price performance of the middle capitalization segment of the U.S. publicly traded stock market.

PERFORMANCE OVERVIEW:

The Trust seeks to match the total return of the S&P MidCap 400 Index. To accomplish this, the Trust utilizes a full replication approach. With this strategy, all 400 securities of the S&P MidCap 400 Index are owned by the Trust in their approximate market capitalization weight. A replication management approach results in low expected tracking error of the Trust relative to its benchmark.


1


MidCap SPDR Trust, Series 1
Schedule of Investments
September 30, 2009

Common Stock   Shares   Value  
3Com Corp.*      3,594,786     $ 18,800,731    
99 Cents Only Stores*     415,441       5,587,681    
Aaron's, Inc.     498,626       13,163,726    
ACI Worldwide, Inc.*     312,714       4,731,363    
Acxiom Corp.*     725,236       6,860,733    
ADC Telecommunications, Inc.*     888,216       7,407,721    
Adtran, Inc.     513,666       12,610,500    
Advance Auto Parts, Inc.     877,374       34,463,251    
Aecom Technology Corp.*     1,014,073       27,521,941    
Aeropostale, Inc.*     617,483       26,841,986    
Advent Software, Inc.*     142,926       5,752,771    
Affiliated Managers Group, Inc.*     383,114       24,906,241    
Affymetrix, Inc.*     649,126       5,699,326    
AGCO Corp.*     849,804       23,480,085    
AGL Resources, Inc.     710,350       25,054,044    
Airtran Holdings, Inc.*     1,104,433       6,902,706    
Alaska Air Group, Inc.*     322,789       8,647,517    
Albemarle Corp.     841,529       29,116,903    
Alberto-Culver Co.     784,934       21,726,973    
Alexander & Baldwin, Inc.     377,268       12,106,530    
Alexandria Real Estate Equities, Inc.     399,229       21,698,096    
Alliance Data Systems Corp.*     488,496       29,837,336    
Alliant Energy Corp.     1,016,864       28,319,662    
Alliant Techsystems, Inc.*     302,620       23,558,967    
AMB Property Corp.     1,344,348       30,852,787    
American Eagle Outfitters, Inc.     1,906,224       32,138,937    
American Financial Group, Inc.     725,427       18,498,388    
American Greetings Corp., Class A     362,355       8,080,516    
AmeriCredit Corp.*     882,085       13,928,122    
Ametek, Inc.     988,321       34,502,286    
AnnTaylor Stores Corp.*     539,781       8,577,120    
Ansys, Inc.*     809,696       30,339,309    
Apollo Investment Corp.     1,504,815       14,370,983    
AptarGroup, Inc.     622,221       23,246,177    
Aqua America, Inc.     1,249,378       22,039,028    
Arch Coal, Inc.     1,493,467       33,050,425    
Arrow Electronics, Inc.*     1,099,667       30,955,626    
Arthur J. Gallagher & Co.     930,243       22,670,022    
Ashland, Inc.     684,172       29,569,914    

 

The accompanying notes are an integral part of these financial statements.
2


MidCap SPDR Trust, Series 1
Schedule of Investments
September 30, 2009

Common Stock   Shares   Value  
Associated Banc-Corp.     1,175,341     $ 13,422,394    
Astoria Financial Corp.     749,344       8,272,758    
Atmel Corp.*     4,146,826       17,375,201    
Avnet, Inc.*     1,388,776       36,066,513    
Avocent Corp.*     407,694       8,263,957    
BancorpSouth, Inc.     674,678       16,468,890    
Bank of Hawaii Corp.     440,157       18,284,122    
Barnes & Noble, Inc.     362,636       8,057,772    
BE Aerospace, Inc.*     929,798       18,726,132    
Beckman Coulter, Inc.     630,123       43,440,680    
Bill Barrett Corp.*     355,152       11,645,434    
Bio-Rad Laboratories, Inc., Class A*     176,454       16,212,594    
BJ's Wholesale Club, Inc.*     510,227       18,480,422    
Black Hills Corp.     357,045       8,986,823    
Blyth, Inc.     54,851       2,124,379    
Bob Evans Farms, Inc.     284,870       8,278,322    
BorgWarner, Inc.     1,072,296       32,447,677    
Boyd Gaming Corp.*     506,564       5,536,745    
BRE Properties, Inc.     485,559       15,197,997    
Brinker International, Inc.     938,928       14,769,337    
Brink's Co./The     418,914       11,272,976    
Brink's Home Security Holdings, Inc.*     420,715       12,953,815    
Broadridge Financial Solutions, Inc.     1,280,439       25,736,824    
Brown & Brown, Inc.     1,079,399       20,681,285    
Bucyrus International, Inc.     690,638       24,600,526    
Cleco Corp.     555,902       13,942,022    
Cabot Corp.     601,005       13,889,226    
Cadence Design Systems, Inc.*     2,448,790       17,974,119    
Callaway Golf Co.     592,686       4,510,340    
Camden Property Trust     589,431       23,754,069    
Career Education Corp.*     634,068       15,458,578    
Carlisle Cos, Inc.     563,005       19,091,500    
Carmax, Inc.*     2,024,981       42,322,103    
Carpenter Technology Corp.     404,730       9,466,635    
Cathay General Bancorp.     455,715       3,686,734    
Cerner Corp.*     618,292       46,248,242    
Charles River Laboratories International, Inc.*     605,707       22,399,045    
Cheesecake Factory/The*     552,947       10,240,578    
Chico's FAS, Inc.*     1,634,865       21,253,245    

 

The accompanying notes are an integral part of these financial statements.
3


MidCap SPDR Trust, Series 1
Schedule of Investments
September 30, 2009

Common Stock   Shares   Value  
Chipotle Mexican Grill, Inc., Class A*     290,846     $ 28,226,604    
Church & Dwight Co., Inc.     646,235       36,667,374    
Cimarex Energy Co.     766,658       33,211,625    
Cincinnati Bell, Inc.*     1,948,363       6,819,271    
City National Corp.     397,437       15,472,222    
Clean Harbors, Inc.*     209,563       11,790,014    
Cliffs Natural Resources, Inc.     1,204,102       38,964,741    
Coldwater Creek, Inc.*     529,597       4,342,695    
Collective Brands, Inc.*     588,811       10,204,095    
Commerce Bancshares, Inc.     639,042       23,797,924    
Commercial Metals Co.     1,034,396       18,515,688    
CommScope, Inc.*     860,436       25,752,849    
Community Health Systems, Inc.*     852,368       27,216,110    
Comstock Resources, Inc.*     428,535       17,175,683    
Con-way, Inc.     450,632       17,268,218    
Copart, Inc.*     618,610       20,544,038    
Corinthian Colleges, Inc.*     800,765       14,862,198    
Corn Products International, Inc.     686,137       19,568,627    
Corporate Executive Board Co./The     313,725       7,811,752    
Corporate Office Properties Trust SBI MD     533,298       19,668,030    
Corrections Corp. of America*     1,058,876       23,983,541    
Cousins Properties, Inc.     854,587       7,075,980    
Covance, Inc.*     588,048       31,842,799    
Crane Co.     430,018       11,098,765    
Cree, Inc.*     926,298       34,041,451    
Cullen/Frost Bankers, Inc.     548,612       28,330,324    
Cytec Industries, Inc.     445,594       14,468,437    
Deluxe Corp.     470,074       8,038,265    
Dick's Sporting Goods, Inc.*     807,440       18,086,656    
Diebold, Inc.     609,034       20,055,490    
Digital River, Inc.*     354,580       14,296,666    
Dollar Tree, Inc.*     821,688       39,999,772    
Donaldson Co., Inc.     709,406       24,566,730    
DPL, Inc.     1,066,051       27,823,931    
DreamWorks Animation SKG, Inc., Class A*     693,466       24,666,586    
DST Systems, Inc.*     361,092       16,176,922    
Duke Realty Corp.     2,058,774       24,725,876    
Dycom Industries, Inc.*     358,500       4,409,550    
Eaton Vance Corp.     1,079,717       30,221,279    

 

The accompanying notes are an integral part of these financial statements.
4


MidCap SPDR Trust, Series 1
Schedule of Investments
September 30, 2009

Common Stock   Shares   Value  
Edwards Lifesciences Corp.*     518,622     $ 36,256,864    
Encore Acquisition Co.*     510,675       19,099,245    
Endo Pharmaceuticals Holdings, Inc.*     1,077,125       24,375,339    
Energen Corp.     659,193       28,411,218    
Energizer Holdings, Inc.*     637,988       42,324,124    
Equinix, Inc.*     354,916       32,652,272    
Equity One, Inc.     301,539       4,725,116    
Essex Property Trust, Inc.     259,164       20,624,271    
Everest Re Group, Ltd.     559,387       49,058,240    
Exterran Holdings, Inc.*     574,382       13,635,829    
F5 Networks, Inc.*     723,701       28,680,271    
Factset Research Systems, Inc.     385,733       25,550,954    
Fair Isaac Corp.     449,076       9,650,643    
Fairchild Semiconductor International, Inc.*     1,139,015       11,652,123    
Federal Realty Investment Trust     562,332       34,510,315    
Federal Signal Corp.     448,140       3,222,127    
Fidelity National Financial, Inc., Class A     2,119,952       31,968,876    
First American Corp.     858,244       27,781,358    
First Niagara Financial Group, Inc.     1,683,440       20,756,815    
FirstMerit Corp.     789,336       15,021,064    
Flowers Foods, Inc.     712,242       18,724,842    
Foot Locker, Inc.     1,437,818       17,181,925    
Forest Oil Corp.*     1,031,768       20,191,700    
Fossil, Inc.*     441,211       12,552,453    
Frontier Oil Corp.     962,115       13,392,641    
FTI Consulting, Inc.*     475,493       20,260,757    
Fulton Financial Corp.     1,618,181       11,909,812    
Gartner, Inc.*     549,448       10,038,415    
GATX Corp.     422,843       11,818,462    
Gen-Probe, Inc.*     462,717       19,174,992    
Gentex Corp.     1,266,174       17,916,362    
Global Payments, Inc.     740,286       34,571,356    
Graco, Inc.     550,819       15,351,326    
Granite Construction, Inc.     309,278       9,569,061    
Great Plains Energy, Inc.     1,242,677       22,306,052    
Greif, Inc., Class A     314,442       17,310,032    
Guess?, Inc.     533,590       19,764,174    
Hanesbrands, Inc.*     870,874       18,636,704    
Hanover Insurance Group, Inc./The     467,528       19,322,932    

 

The accompanying notes are an integral part of these financial statements.
5


MidCap SPDR Trust, Series 1
Schedule of Investments
September 30, 2009

Common Stock   Shares   Value  
Hansen Natural Corp.*     666,467     $ 24,485,998    
Harsco Corp.     738,257       26,141,680    
Harte-Hanks, Inc.     350,596       4,848,743    
Hawaiian Electric Industries, Inc.     841,611       15,249,991    
HCC Insurance Holdings, Inc.     1,032,268       28,232,530    
Health Management Associates, Inc., Class A*     2,267,134       16,980,834    
Health Net, Inc.*     954,659       14,701,749    
Helix Energy Solutions Group, Inc.*     836,592       12,532,148    
Helmerich & Payne, Inc.     969,372       38,319,275    
Henry Schein, Inc.*     829,026       45,521,818    
Herman Miller, Inc.     513,712       8,686,870    
Hewitt Associates, Inc., Class A*     761,420       27,738,531    
Highwoods Properties, Inc.     651,364       20,485,398    
Hill-Rom Holdings, Inc.     575,671       12,538,114    
HNI Corp.     413,513       9,758,907    
Hologic, Inc.*     2,359,011       38,546,240    
Horace Mann Educators Corp.     360,117       5,030,834    
Hospitality Properties Trust     1,122,618       22,867,729    
Hubbell, Inc., Class B     518,431       21,774,102    
Idacorp, Inc.     434,299       12,503,468    
IDEX Corp.     741,933       20,737,027    
Idexx Laboratories, Inc.*     538,655       26,932,750    
Imation Corp.     276,378       2,562,024    
Immucor, Inc.*     647,927       11,468,308    
Informatica Corp.*     812,278       18,341,237    
Ingram Micro, Inc., Class A*     1,498,615       25,251,663    
Integrated Device Technology, Inc.*     1,521,975       10,288,551    
International Bancshares Corp.     476,474       7,771,291    
International Rectifier Corp.*     654,609       12,758,329    
International Speedway Corp., Class A     282,179       7,779,675    
Intersil Corp., Class A     1,124,174       17,211,104    
Itron, Inc.*     367,629       23,579,724    
ITT Educational Services, Inc.*     291,164       32,147,417    
J. Crew Group, Inc.*     511,611       18,325,906    
Jack Henry & Associates, Inc.     773,921       18,163,926    
JB Hunt Transport Services, Inc.     804,549       25,850,159    
Jefferies Group, Inc.*     1,126,166       30,665,500    
JetBlue Airways Corp.*     1,970,651       11,784,493    
John Wiley & Sons, Inc., Class A     393,253       13,677,339    

 

The accompanying notes are an integral part of these financial statements.
6


MidCap SPDR Trust, Series 1
Schedule of Investments
September 30, 2009

Common Stock   Shares   Value  
Jones Lang LaSalle, Inc.     384,016     $ 18,190,838    
Joy Global, Inc.     940,554       46,030,713    
Kansas City Southern*     872,092       23,101,717    
KBR, Inc.     1,474,507       34,341,268    
Kelly Services, Inc., Class A     244,079       3,002,172    
Kennametal, Inc.     747,252       18,389,872    
Kindred Healthcare, Inc.*     358,800       5,823,324    
Kinetic Concepts, Inc.*     568,288       21,015,290    
Kirby Corp.*     494,351       18,202,004    
Korn/Ferry International*     419,752       6,124,182    
Lam Research Corp.*     1,164,055       39,764,119    
Lamar Advertising Co., Class A*     489,168       13,422,770    
Lancaster Colony Corp.     178,226       9,137,647    
Landstar System, Inc.     471,673       17,951,874    
Lender Processing Services, Inc.     883,714       33,731,363    
Lennox International, Inc.     446,330       16,121,440    
Liberty Property Trust     1,026,312       33,385,929    
Life Time Fitness, Inc.*     379,323       10,640,010    
LifePoint Hospitals, Inc.*     503,600       13,627,416    
LIncare Holdings, Inc.*     623,775       19,492,969    
Lincoln Electric Holdings, Inc.     390,879       18,547,209    
LKQ Corp.*     1,293,917       23,989,221    
Louisiana-Pacific Corp.*     1,119,446       7,466,705    
Lubrizol Corp.     621,655       44,423,466    
Macerich Co./The     742,739       22,527,274    
Mack-Cali Realty Corp.     720,071       23,279,895    
Manpower, Inc.     720,507       40,859,952    
Mantech International Corp., Class A*     202,942       9,570,745    
Mariner Energy, Inc.*     936,200       13,275,316    
Martin Marietta Materials, Inc.     409,413       37,694,655    
Marvel Entertainment, Inc.*     447,359       22,197,954    
Masimo Corp.*     476,647       12,488,151    
Matthews International Corp., Class A     278,888       9,867,057    
MDC Holdings, Inc.     345,350       11,997,459    
MDU Resources Group, Inc.     1,692,044       35,279,117    
Medicis Pharmaceutical Corp., Class A     528,195       11,276,963    
Mentor Graphics Corp.*     902,172       8,399,221    
Mercury General Corp.     327,246       11,839,760    
Metavante Technologies, Inc.*     827,818       28,543,165    

 

The accompanying notes are an integral part of these financial statements.
7


MidCap SPDR Trust, Series 1
Schedule of Investments
September 30, 2009

Common Stock   Shares   Value  
Mettler-Toledo International, Inc.*     309,832     $ 28,067,681    
Micros Systems, Inc.*     735,130       22,193,575    
Mine Safety Appliances Co.     277,698       7,639,472    
Minerals Technologies, Inc.     172,162       8,188,025    
Mohawk Industries, Inc.*     515,967       24,606,466    
MPS Group, Inc.*      856,188       9,007,098    
MSC Industrial Direct Co., Class A     402,810       17,554,460    
National Fuel Gas Co.     737,522       33,785,883    
National Instruments Corp.     520,905       14,392,605    
Nationwide Health Properties, Inc.     981,228       30,408,256    
Navigant Consulting, Inc.*     445,231       6,010,619    
NBTY, Inc.*     568,762       22,511,600    
NCR Corp.*     1,460,651       20,186,197    
NetFlix, Inc.*     416,961       19,251,089    
NeuStar, Inc., Class A*     683,391       15,444,637    
New York Community Bancorp, Inc.     3,216,955       36,737,626    
NewAlliance Bancshares, Inc.     981,600       10,503,120    
Newfield Exploration Co.*     1,219,406       51,897,919    
Nordson Corp.     308,833       17,322,443    
NSTAR     981,812       31,241,258    
NV Energy, Inc.     2,156,642       24,995,481    
NVR, Inc.*     53,404       34,038,107    
Oceaneering International, Inc.*     504,345       28,621,579    
OGE Energy Corp.     887,631       29,362,833    
Old Republic International Corp.     2,211,511       26,936,204    
Olin Corp.     719,145       12,541,889    
Omega Healthcare Investors, Inc.     765,383       12,261,436    
Omnicare, Inc.     1,097,158       24,707,998    
Oneok, Inc.     968,788       35,477,017    
Oshkosh Corp.     821,715       25,415,645    
OSI Pharmaceuticals, Inc.*     533,399       18,828,985    
Overseas Shipholding Group, Inc.     214,855       8,029,131    
Owens & Minor, Inc.     384,034       17,377,539    
Packaging Corp of America     946,200       19,302,480    
PacWest Bancorp     251,517       4,791,399    
Palm, Inc.*     1,472,461       25,664,995    
Panera Bread Co., Class A*     286,790       15,773,450    
Parametric Technology Corp.*     1,067,970       14,759,345    
Patriot Coal Corp.*     689,073       8,103,498    

 

The accompanying notes are an integral part of these financial statements.
8


MidCap SPDR Trust, Series 1
Schedule of Investments
September 30, 2009

Common Stock   Shares   Value  
Patterson-UTI Energy, Inc.     1,412,036     $ 21,321,744    
Pentair, Inc.     903,746       26,678,582    
PepsiAmericas, Inc.     515,029       14,709,228    
Perrigo Co.     729,166       24,784,352    
PetSmart, Inc.     1,149,236       24,995,883    
Pharmaceutical Product Development, Inc.     1,086,101       23,829,056    
Phillips-Van Heusen Corp.     474,709       20,312,798    
Plains Exploration & Production Co.*     1,280,049       35,406,155    
Plantronics, Inc.     449,376       12,047,771    
PNM Resources, Inc.      796,699       9,305,444    
Polycom, Inc.*     772,713       20,670,073    
Potlatch Corp.     365,337       10,393,838    
priceline.com, Inc.*     388,560       64,431,019    
Pride International, Inc.*     1,595,765       48,575,087    
Protective Life Corp.     786,671       16,850,493    
Psychiatric Solutions, Inc.*     517,048       13,836,204    
Quest Software, Inc.*     559,514       9,427,811    
Quicksilver Resources, Inc.*     1,088,747       15,449,320    
Ralcorp Holdings, Inc.*     520,339       30,424,221    
Raymond James Financial, Inc.     908,045       21,139,288    
Rayonier, Inc.     727,855       29,776,548    
Realty Income Corp.     958,567       24,587,244    
Regency Centers Corp.     738,039       27,344,345    
Regis Corp.     524,904       8,136,012    
Reinsurance Group of America, Inc.     668,959       29,835,571    
Reliance Steel & Aluminum Co.     587,603       25,008,384    
Rent-A-Center, Inc.*     607,072       11,461,519    
Resmed, Inc.*     694,420       31,387,784    
RF Micro Devices, Inc.*     2,455,326       13,332,420    
Rollins, Inc.     401,082       7,560,396    
Roper Industries, Inc.     834,884       42,562,386    
Ross Stores, Inc.     1,149,908       54,931,105    
Rovi Corp.*     934,753       31,407,701    
RPM International, Inc.     1,185,017       21,910,964    
Ruddick Corp.     374,713       9,974,860    
Ryland Group, Inc.     402,665       8,484,152    
SAIC, Inc.*     1,928,357       33,823,382    
Saks, Inc.*     1,328,415       9,059,790    
Scholastic Corp.     234,149       5,699,187    

 

The accompanying notes are an integral part of these financial statements.
9


MidCap SPDR Trust, Series 1
Schedule of Investments
September 30, 2009

Common Stock   Shares   Value  
Scientific Games Corp., Class A*     596,770     $ 9,446,869    
Scotts Miracle-Gro Co./The, Class A     410,985       17,651,806    
SEI Investments Co.     1,194,136       23,500,596    
Semtech Corp.*     564,770       9,606,738    
Sensient Technologies Corp.     448,322       12,449,902    
Sepracor, Inc.*     1,020,230       23,363,267    
Service Corp. International     2,307,290       16,174,103    
Shaw Group, Inc./The*     768,211       24,651,891    
Silicon Laboratories, Inc.*     412,341       19,116,129    
SL Green Realty Corp.     706,278       30,970,290    
Smithfield Foods, Inc.*     1,294,553       17,864,831    
Sonoco Products Co.     918,230       25,288,054    
Sotheby's     614,901       10,594,744    
Southern Union Co.     1,140,350       23,707,876    
SPX Corp.     451,168       27,643,063    
SRA International, Inc., Class A*     392,917       8,483,078    
Stancorp Financial Group, Inc.     451,849       18,241,144    
Steel Dynamics, Inc.     1,977,826       30,339,851    
STERIS Corp.     538,673       16,402,593    
Strayer Education, Inc.     128,633       28,000,831    
Superior Energy Services, Inc.*     718,709       16,185,327    
SVB Financial Group*     304,921       13,193,932    
Sybase, Inc.*     744,015       28,942,183    
Syniverse Holdings, Inc.*     632,021       11,060,367    
Synopsys, Inc.*     1,339,692       30,035,895    
Synovus Financial Corp.     4,415,711       16,558,916    
TCF Financial Corp.     1,027,030       13,392,471    
Tech Data Corp.*     462,133       19,229,354    
Techne Corp.     342,358       21,414,493    
Teleflex, Inc.     365,137       17,639,768    
Telephone & Data Systems, Inc.     872,391       27,052,845    
Temple-Inland, Inc.     979,036       16,075,771    
Terex Corp.*     992,759       20,579,894    
Terra Industries, Inc.     917,249       31,801,023    
Thomas & Betts Corp.*     485,841       14,614,097    
Thor Industries, Inc.     326,165       10,094,807    
Thoratec Corp.*     520,076       15,742,701    
Tidewater, Inc.     475,275       22,380,700    
Timberland Co., Class A*     412,459       5,741,429    

 

The accompanying notes are an integral part of these financial statements.
10


MidCap SPDR Trust, Series 1
Schedule of Investments
September 30, 2009

Common Stock   Shares   Value  
Timken Co.     729,774     $ 17,098,605    
Toll Brothers, Inc.*     1,260,418       24,628,568    
Tootsie Roll Industries, Inc.     242,071       5,756,448    
Trimble Navigation Ltd.*     1,101,296       26,331,987    
Trinity Industries, Inc.     728,757       12,527,333    
Trustmark Corp.     469,772       8,949,157    
Tupperware Brands Corp.     578,862       23,108,171    
UDR, Inc.     1,383,938       21,783,184    
UGI Corp.     996,568       24,973,994    
Under Armour, Inc., Class A*     344,623       9,590,858    
Unit Corp.*     371,276       15,315,135    
United Rentals, Inc.*     552,702       5,692,831    
United Therapeutics Corp.*     430,054       21,068,345    
Unitrin, Inc.     458,815       8,942,304    
Universal Corp.     228,139       9,540,773    
Universal Health Services, Inc., Class B     451,277       27,947,585    
Urban Outfitters, Inc.*     1,191,281       35,940,948    
URS Corp.*     775,023       33,829,754    
Valeant Pharmaceuticals International*     619,748       17,390,129    
Valley National Bancorp     1,314,567       16,156,028    
Valmont Industries, Inc.     183,481       15,628,912    
Valspar Corp.     926,843       25,497,451    
Valueclick, Inc.*     801,119       10,566,760    
Varian, Inc.*     265,694       13,566,336    
VCA Antech, Inc.*     780,587       20,989,984    
Vectren Corp.     745,396       17,173,924    
Vertex Pharmaceuticals, Inc.*     1,660,635       62,938,067    
Vishay Intertechnology, Inc.*     1,715,586       13,553,129    
Wabtec Corp.     437,193       16,407,853    
Waddell & Reed Financial, Inc., Class A     789,391       22,458,174    
Warnaco Group, Inc./The*     417,542       18,313,392    
Washington Federal, Inc.     1,002,399       16,900,447    
Waste Connections, Inc.*     736,359       21,251,321    
Watson Wyatt Worldwide, Inc., Class A     392,308       17,088,936    
Webster Financial Corp.     589,404       7,349,868    
Weingarten Realty Investors     957,968       19,082,723    
WellCare Health Plans, Inc.*     388,034       9,565,038    
Wendy's/Arby's Group, Inc., Class A     3,376,596       15,971,299    
Werner Enterprises, Inc.     402,275       7,494,383    

 

The accompanying notes are an integral part of these financial statements.
11


MidCap SPDR Trust, Series 1
Schedule of Investments
September 30, 2009

Common Stock   Shares   Value  
Westamerica Bancorporation     268,522     $ 13,963,144    
Westar Energy, Inc.     1,000,643       19,522,545    
WGL Holdings, Inc.     460,907       15,274,458    
Williams-Sonoma, Inc.     971,882       19,661,173    
Wilmington Trust Corp.     637,068       9,046,366    
WMS Industries, Inc.*     417,642       18,610,128    
Woodward Governor Co.     518,259       12,572,963    
Worthington Industries, Inc.     559,823       7,781,540    
WR Berkley Corp.     1,236,039       31,247,066    
Zebra Technologies Corp., Class A*     543,145       14,083,750    
Total Investments (Cost $10,528,774,292)           $ 7,938,335,918    

 

(*)  Non-income producing security for the year ended September 30, 2009.

The securities of the MidCap SPDR Trust's, investment portfolio categorized by industry group, as a percentage of total investments at value, are as follows:

Industry Classification   Value   Percentage  
Retail   $ 630,023,537       7.94 %  
Commercial Services     527,327,467       6.64 %  
REITS     502,210,078       6.33 %  
Insurance     367,137,007       4.63 %  
Healthcare-Products     358,030,104       4.51 %  
Oil & Gas     354,276,279       4.46 %  
Electric     278,838,627       3.51 %  
Banks     257,566,058       3.25 %  
Chemicals     243,857,200       3.07 %  
Software     238,904,371       3.01 %  
Electronics     231,617,023       2.92 %  
Miscellaneous Manufacturing     212,995,758       2.68 %  
Semiconductors     203,221,446       2.56 %  
Computers     189,895,442       2.39 %  
Healthcare-Services     181,034,028       2.28 %  
Internet     178,142,034       2.25 %  
Telecommunications     170,999,185       2.16 %  
Pharmaceuticals     169,399,632       2.13 %  
Gas     168,381,397       2.12 %  
Transportation     152,384,716       1.92 %  
Machinery-Diversified     149,944,870       1.89 %  
Diversified Financial Services     143,318,604       1.81 %  
Biotechnology     141,447,036       1.78 %  

 

The accompanying notes are an integral part of these financial statements.
12


MidCap SPDR Trust, Series 1
Schedule of Investments
September 30, 2009

Industry Classification   Value   Percentage  
Engineering & Construction   $ 134,323,465       1.69 %  
Food     111,451,476       1.40 %  
Iron/Steel     103,779,611       1.31 %  
Electrical Component & Equipment     98,600,512       1.24 %  
Distribution/Wholesale     98,400,230       1.24 %  
Savings & Loans     93,170,766       1.17 %  
Machinery-Construction & Mining     91,211,133       1.15 %  
Home Builders     89,243,093       1.12 %  
Household Products/Wares     87,632,246       1.10 %  
Packaging & Containers     77,976,337       0.98 %  
Oil & Gas Services     70,974,883       0.89 %  
Building Materials     61,282,800       0.77 %  
Metal Fabricate/Hardware     59,024,745       0.74 %  
Apparel     52,282,383       0.66 %  
Media     44,927,480       0.57 %  
Aerospace/Defense     42,285,099       0.53 %  
Entertainment     41,893,130       0.53 %  
Coal     41,153,923       0.52 %  
Environmental Control     40,680,807       0.51 %  
Beverages     39,195,226       0.49 %  
Hand/Machine Tools     36,937,081       0.47 %  
Pipelines     35,477,017       0.45 %  
Leisure Time     33,760,478       0.43 %  
Auto Parts & Equipment     32,447,677       0.41 %  
Forest Products & Paper     29,776,548       0.38 %  
Airlines     27,334,716       0.34 %  
Auto Manufacturers     25,415,645       0.32 %  
Textiles     24,606,466       0.31 %  
Toys/Games/Hobbies     22,197,954       0.28 %  
Water     22,039,028       0.28 %  
Cosmetics/Personal Care     21,726,973       0.27 %  
Office Furnishings     18,445,777       0.23 %  
Advertising     18,271,513       0.23 %  
Real Estate     18,190,838       0.23 %  
Investment Companies     14,370,983       0.18 %  
Trucking & Leasing     11,818,462       0.15 %  
Agriculture     9,540,773       0.12 %  
Lodging     5,536,745       0.07 %  
Total   $ 7,938,335,918       100.00 %  

 

The accompanying notes are an integral part of these financial statements.
13


MidCap SPDR Trust, Series 1
Schedule of Investments
September 30, 2009

Various inputs are used in determining the value of the Trust's investments. These inputs are summarized in the three broad levels listed below.

Level 1 - quoted prices in active markets for identical securities

Level 2 - other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

Level 3 - significant unobservable inputs (including the Trust's own assumptions in determining the fair value of investments)

The following is a summary of the inputs used as of September 30, 2009 in valuing the Trust's assets carried at fair value:

    Level 1   Level 2   Level 3   Total  
Investments in Securities  
Common Stocks   $ 7,938,335,918     $ —     $ —     $ 7,938,335,918    
Total   $ 7,938,335,918     $ —     $ —     $ 7,938,335,918    

 

Please refer to the Schedule of Investments for a further breakout of each security by industry type.

The accompanying notes are an integral part of these financial statements.
14



MidCap SPDR Trust, Series 1
Statement of Assets and Liabilities

    September 30, 2009  
Assets:  
Investments in securities, at value (cost $10,528,774,292)   $ 7,938,335,918    
Cash     33,508,040    
Receivable from units created     94,471,584    
Dividends receivable     7,036,388    
Receivable for securities sold     762    
Total Assets     8,073,352,692    
Liabilities:  
Payable for securities purchased     95,712,948    
Distribution payable     22,710,015    
License fee payable     814,559    
Payable to Sponsor     7,134,414    
Accrued Trustee fees     649,882    
Other accrued expenses     307,609    
Total Liabilities     127,329,427    
NET ASSETS   $ 7,946,023,265    
Net assets represented by:  
Interest of Unitholders (63,321,051 units of fractional undivided
interest (MidCap SPDRs) outstanding; unlimited units
authorized)		  
Paid in capital   $ 11,843,055,546    
Distributions in excess of net investment income     (28,206,271 )  
Accumulated net realized loss on investments     (1,278,387,636 )  
Unrealized depreciation on investments     (2,590,438,374 )  
NET ASSETS   $ 7,946,023,265    
Net asset value per MidCap SPDR ($7,946,023,265/63,321,051
MidCap SPDRs)		   $ 125.49    

 

The accompanying notes are an integral part of these financial statements.
15


MidCap SPDR Trust, Series 1
Statements of Operations

    Year Ended September 30,  
    2009   2008   2007  
Investment income  
Dividend income   $ 110,616,973     $ 117,530,559     $ 138,279,498    
Expenses  
Trustee fees and expenses     6,683,329       9,237,628       9,628,010    
Printing and distribution expenses     6,588,294       10,747,721       11,456,710    
Audit fees     109,090       120,000       143,112    
Legal fees     215,959       93,238       103,862    
License fees     1,935,636       2,736,388       2,816,239    
Other fees and expenses     316,549       126,311       —    
Total expenses     15,848,857       23,061,286       24,147,933    
Less: voluntary fee reduction
by the Trustee (see Note 3)		     (72,977 )     (704,533 )     (1,172,886 )  
Net expenses     15,775,880       22,356,753       22,975,047    
Net Investment Income     94,841,093       95,173,806       115,304,451    
Realized and unrealized gain
(loss) on investments		  
Net realized loss     (1,155,621,079 )     (573,029,061 )     (4,809,644 )  
Net realized gain from in-kind
redemptions		     40,604,047       1,156,366,002       1,227,357,766    
Net increase (decrease) in unrealized
appreciation (depreciation) of
investments		     601,009,975       (2,351,208,029 )     81,995,656    
Net realized and unrealized
gain (loss) on investments		     (514,007,057 )     (1,767,871,088 )     1,304,543,778    
Net increase (decrease) in
net assets resulting
from operations		   $ (419,165,964 )   $ (1,672,697,282 )   $ 1,419,848,229    

 

The accompanying notes are an integral part of these financial statements.
16


MidCap SPDR Trust, Series 1
Statements of Changes in Net Assets

    Year Ended September 30,  
    2009   2008   2007  
Increase (Decrease) in Net Assets From:  
Operations:  
Net investment income   $ 94,841,093     $ 95,173,806     $ 115,304,451    
Net realized gain (loss) on investments
and in-kind redemptions		     (1,115,017,032 )     583,336,941       1,222,548,122    
Net increase (decrease) in unrealized
appreciation (depreciation) on
investments		     601,009,975       (2,351,208,029 )     81,995,656    
Net increase (decrease) in net assets
resulting from operations		     (419,165,964 )     (1,672,697,282 )     1,419,848,229    
Dividends and Distributions to Unitholders from:  
Net investment income     (102,439,497 )     (105,741,473 )     (115,754,474 )  
Unitholder Transactions:  
Proceeds from subscriptions of
MidCap SPDR units		     14,244,234,768       23,784,672,829       12,039,027,297    
Reinvestment of dividends and
distributions		     753,705       767,329       1,026,976    
Less: Redemptions of MidCap SPDR
units		     (14,123,323,990 )     (23,639,153,195 )     (11,712,693,191 )  
Increase in net assets due to
unitholder transactions		     121,664,483       146,286,963       327,361,082    
Total increase (decrease)     (399,940,978 )     (1,632,151,792 )     1,631,454,837    
Net Assets:  
Beginning of year     8,345,964,243       9,978,116,035       8,346,661,198    
End of year (including undistributed
(distributions in excess of) net
investment income of $(28,206,271),
$(19,046,278) and $(3,306,976),
respectively)		   $ 7,946,023,265     $ 8,345,964,243     $ 9,978,116,035    

 

The accompanying notes are an integral part of these financial statements.
17


MidCap SPDR Trust, Series 1
Financial Highlights
Selected Data for a MidCap SPDR

    Year Ended September 30,  
    2009   2008   2007   2006   2005  
Net Asset Value, Beginning
of Year		   $ 132.13     $ 160.79     $ 137.56     $ 130.82     $ 108.59    
Investment Operations:  
Net investment income*     1.51       1.61       1.83       1.58       1.36    
Net realized and
unrealized gain (loss)
on investments		     (6.48 )     (28.56 )     23.39       6.65       22.21    
Total from Investment Operations     (4.97 )     (26.95 )     25.22       8.23       23.57    
Less Distributions from:  
Net investment income     (1.67 )     (1.71 )     (1.99 )     (1.49 )     (1.34 )  
Net Asset Value, End of Year   $ 125.49     $ 132.13     $ 160.79     $ 137.56     $ 130.82    
Total Investment Return**     (3.47 )%     (16.84 )%     18.37 %     6.26 %     21.77 %  
Ratios and Supplemental Data  
Net assets, end of
year (000's)		   $ 7,946,023     $ 8,345,964     $ 9,978,116     $ 8,346,661     $ 8,326,235    
Ratio of expenses to average
net assets(1)		     0.25 %     0.25 %     0.25 %     0.25 %     0.25 %  
Ratio of net investment
income to average
net assets(1)		     1.50 %     1.08 %     1.26 %     1.13 %     1.11 %  
Portfolio turnover rate(2)     24.59 %     28.95 %     21.30 %     16.87 %     19.17 %  

 

(1)  Net of voluntary fee reduction by the Trustee. Before voluntary fee reduction by the Trustee, the net investment income and expenses to average net assets ratios would have been 1.50% and 0.25% for the year ended September 30, 2009, 1.06% and 0.26% for the year ended September 30, 2008, 1.25% and 0.26% for the year ended September 30, 2007, 1.12% and 0.26% for the year ended September 30, 2006, 1.10% and 0.25% for the year ended September 30, 2005. (See Note 3).

(2)  Portfolio turnover rate excludes securities received or delivered from processing creations or redemptions of MidCap SPDRs.

*  Per share amounts have been calculated using the average share method.

**  Net asset value total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption on the last day of the period.

The accompanying notes are an integral part of these financial statements.
18



MidCap SPDR Trust, Series 1
Notes to Financial Statements
September 30, 2009

Note 1 - Organization

MidCap SPDR Trust, Series 1 (the "Trust") is a unit investment trust created under the laws of the State of New York and registered under the Investment Company Act of 1940. The Trust was created to provide investors with the opportunity to purchase a security representing a proportionate undivided interest in a portfolio of securities consisting of substantially all of the common stocks, in substantially the same weighting, which comprise the Standard & Poor's MidCap 400 Index (the "S&P MidCap 400 Index"). Each unit of fractional undivided interest in the Trust is referred to as a MidCap Standard & Poor's Depositary Receipt ("MidCap SPDR"). The Trust commenced operations on April 27, 1995 upon the initial issuance of 375,000 MidCap SPDRs (equivalent to 15 "Creation Units"- see Note 4) in exchange for a portfolio of securities assembled to reflect the intended portfolio composition of the Trust.

Note 2 - Summary of Significant Accounting Policies

The financial statements of the Trust are prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP").

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from these estimates. The following is a summary of significant accounting policies followed by the Trust.

Security Valuation - Trust securities are valued based on the closing sale price on the exchange deemed to be the principal market for the security. If no closing sale price is available, then the security is valued at the mean between the closing bid and offer prices on the exchange deemed to be the principal market for the security. If there are no closing bid and offer prices available, valuation will be determined by the Trustee in good faith based on available information.

The Trust adopted the authoritative guidance for fair value measurements. The guidance also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. The guidance establishes three levels of inputs that may be used to measure fair value. These levels of inputs are summarized at the end of the Schedule of Investments.

Investment Transactions - Investment transactions are recorded on the trade date. Realized gains and losses from the sale or disposition of securities are recorded on a specific identification basis. Dividend income is recorded on the ex-dividend date.


19


Distributions to Unitholders - The Trust intends to declare and distribute dividends from net investment income quarterly. The Trust will distribute net realized capital gains, if any, at least annually.

Federal Income Tax - The Trust has qualified and intends to continue to qualify for and elect treatment as a "regulated investment company" under Subchapter M of the Internal Revenue Code of 1986, as amended. By so qualifying and electing, the Trust is not subject to federal income taxes to the extent it distributes its taxable income, including any net realized capital gains, for each fiscal year. In addition, by distributing during each calendar year substantially all of its net investment income and capital gains, if any, the Trust is not subject to federal excise tax.

GAAP requires the evaluation of tax positions taken in the course of preparing the Trust's tax returns to determine whether the tax positions are "more-likely-than-not" of being sustained by the applicable tax authority. Tax benefits of positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax expense in the current year. The Trustee has reviewed the tax positions for the tax years subject to audit as of September 30, 2009, and has determined that no provision for income taxes is necessary for the year ended September 30, 2009. The 2006, 2007, and 2008 tax years in the period ended September 30, 2009 remain subject to audit.

Note 3 - Transactions with the Trustee and Sponsor

In accordance with the Trust Agreement, The Bank of New York Mellon (formerly the Bank of New York) (the "Trustee") maintains the Trust's accounting records, acts as custodian and transfer agent to the Trust, and provides administrative services, including filing of all required regulatory reports. The Trustee is also responsible for determining the composition of the portfolio of securities which must be delivered in exchange for the issuance of Creation Units of the Trust, and for adjusting the composition of the Trust's portfolio from time to time to conform to changes in the composition and/or weighting structure of the S&P MidCap 400 Index. For these services, the Trustee receives a fee based on the following annual rates:

Net Asset Value of the Trust   Fee as a Percentage of
Net Asset Value of the Trust		  
$0-$500,000,000*   14/100 of 1% per annum  
$500,000,001-$1,000,000,000*   12/100 of 1% per annum  
$1,000,000,001 and above*   10/100 of 1% per annum  

 

*  The fee indicated applies to that portion of the net asset value of the Trust, which falls in the size category indicated.

The Trustee voluntarily agreed to reduce its fee for the years ended September 30, 2009, 2008, and 2007 as disclosed in the Statements of Operations. The amount of the reduction equals the Federal Funds Rate, as published in the Wall Street Journal multiplied by each day's daily cash balance in the Trust's cash


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account, reduced by the amount of reserves for that account required by the Federal Reserve Board of Governors. The Trustee reserves the right to discontinue this voluntary fee reduction in the future.

PDR Services LLC (the "Sponsor", a wholly-owned subsidiary of NYSE Amex US LLC, an indirect wholly-owned subsidiary of NYSE Euronext) agreed to reimburse the Trust for, or assume, the ordinary operating expenses of the Trust, to the extent such expenses exceed 30/100 of 1% per annum of the daily net asset value of the Trust as calculated by the Trustee. There were no expenses assumed by the Sponsor for the years ended September 30, 2009, 2008 and 2007.

The Sponsor retains the ability to be repaid by the Trust for expenses so reimbursed or assumed to the extent that expenses fall below the expense limitation described above on any given day during the year. There is no outstanding amount subject to recoupment by the Sponsor of expenses so reimbursed in subsequent periods.

Note 4 - Trust Transactions in MidCap SPDRs

Transactions in MidCap SPDRs were as follows:

    Year Ended September 30, 2009   Year Ended September 30, 2008  
    MidCap SPDRs   Amount   MidCap SPDRs   Amount  
MidCap SPDRs sold     146,375,000     $ 14,244,234,768       158,750,000     $ 23,784,672,829    
Dividend reinvestment
MidCap SPDRs issued		     7,489       753,705       5,069       767,329    
MidCap SPDRs redeemed      (146,225,000 )     (14,123,323,990 )     (157,650,000 )     (23,639,153,195 )  
Net increase     157,489     $ 121,664,483       1,105,069     $ 146,286,963    

 

    Year Ended September 30, 2007  
    MidCap SPDRs   Amount  
MidCap SPDRs sold     77,325,000     $ 12,039,027,297    
Dividend reinvestment
MidCap SPDRs issued		     6,707       1,026,976    
MidCap SPDRs redeemed     (75,950,000 )     (11,712,693,191 )  
Net increase     1,381,707     $ 327,361,082    

 

Except under the Trust's dividend reinvestment plan, MidCap SPDRs are issued and redeemed by the Trust for authorized participants only in Creation Units of 25,000 MidCap SPDRs. Such transactions are only permitted on an in-kind basis, with a balancing cash component to equate the transaction to the net asset value per unit of the Trust on the transaction date. Transaction fees, in the amount of the lesser of 20/100 of 1% of current market value of 1 Creation Unit or $3,000, are charged to those persons creating or redeeming Creation Units. Transaction fees are received by the Trustee directly from the authorized participants and used to offset the expense of processing orders. During the year ended September 30, 2009, the Trustee earned $1,086,000 in transaction fees. The Trustee, in its sole discretion, may voluntarily reduce or waive its fee, or modify its transaction fee schedule,


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subject to certain limitations. There were no reductions or waivers of such fees for the year ended September 30, 2009.

At September 30, 2009, the Trustee and its affiliates held $1,344,736,831 MidCap SPDRs, or 16.92% of fractional undivided interest in the Trust.

Note 5 - Investment Transactions

For the year ended September 30, 2009 the Trust had net in-kind contributions, net in-kind redemptions, purchases and sales of investment securities of $14,200,007,107, $14,079,640,048, $1,621,358,060 and $1,618,028,195, respectively.

Note 6 - Federal Income Tax Status

The following details the tax basis distributions and components of distributable earnings as of September 30, 2009. The tax basis components of distributable earnings differ from the amounts reflected in the Statement of Assets and Liabilities by temporary book/tax differences primarily arising from wash sales and amortization of license fees.

Cost of investments for federal income tax purposes   $ 10,728,726,332    
Gross unrealized appreciation   $ 187,175,160    
Gross unrealized depreciation     (2,977,565,574 )  
Net unrealized depreciation   $ (2,790,390,414 )  
Distributable earnings, ordinary income   $ 8,100,639    
Capital loss carryforwards expiring:  
9/30/10     (29,591,377 )  
9/30/11     (109,279,926 )  
9/30/12     (80,183,853 )  
9/30/16     (9,130,465 )  
9/30/17     (163,791,631 )  
    $ (391,977,252 )  

 

For the year ended September 30, 2009, the Trust utilized $0 of capital loss carryforwards.

To the extent that capital losses are used to offset future capital gains, it is probable that gains so offset will not be distributed to shareholders.

At September 30, 2009 the Trust deferred $686,269,300 of capital losses arising subsequent to October 31, 2008. For tax purposes, such losses will be reflected in the year ending September 30, 2010.

The tax composition of dividends paid during the years ending September 30, 2009, September 30, 2008 and September 30, 2007 was ordinary income.


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As of September 30, 2009, the Trust had permanent book/tax differences primarily attributable to gains or losses from in-kind redemptions and distributions received from real estate investment trusts. To reflect reclassifications arising from these differences, accumulated net realized loss on investments was decreased by $516,917,359, additional paid in capital was decreased by $515,355,770, and undistributed net investment income was decreased by $1,561,589.

Note 7 - Representations and Indemnifications

In the normal course of business the Trust enters into contracts that contain a variety of representations and warranties which provide general indemnifications. The Trust's maximum exposure under these arrangements is unknown as this would involve future claims which may be made against the Trust that have not yet occurred. However, based on experience, the Trust expects the risk of loss to be remote.

Note 8 - Related Party Transactions

During the fiscal years ended September 30, 2009, 2008 and 2007 the Trust paid $4,407,615, $4,718,331 and $3,125,040 respectively, in commissions on trades to a related party, BNY ConvergEx. BNY ConvergEx is an affiliate of The Bank of New York Mellon. The standing instructions with the BNY ConvergEx require all trades to be executed at the close of business on any exchange on which the securities are traded.

Note 9 - License Agreement

The License Agreement grants State Street Global Markets, LLC ("SSGM") a license to use the S&P MidCap 400 Index as a basis for determining the composition of the Portfolio and to use certain trade names and trademarks of S&P in connection with the Portfolio. The Trustee on behalf of the Trust, the Sponsor and the Exchange have each received a sublicense from SSGM for the use of the S&P MidCap 400 Index and such trade names and trademarks in connection with their rights and duties with respect to the Trust. The License Agreement may be amended without the consent of any of the Beneficial Owners of MidCap SPDRs. Currently, the License Agreement is scheduled to terminate on April 27, 2020, but its term may be extended beyond such date without the consent of any of the Beneficial Owners of MidCap SPDRs.

Note 10 - Other Matters

The Trustee has evaluated the possibility of subsequent events existing in the Trust's financial statements through December 11, 2009, the date the financial statements were available to be issued. Management has determined that there are no material events that would require disclosure in the Trust's financial statements through this date.


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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Trustee and Unitholders of MidCap SPDR Trust, Series 1:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of MidCap SPDR Trust, Series 1 (the "Trust") at September 30, 2009, the results of its operations and the changes in its net assets for each of the three years in the period ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Trust's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which include confirmation of securities at September 30, 2009 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP
New York, New York
December 11th, 2009


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ESSENTIAL INFORMATION AS OF SEPTEMBER 30, 2009*

Total Trust Assets:   $8,073,352,692  
Net Trust Assets:   $7,946,023,265  
Number of MidCap SPDRs:   63,321,051  
Fractional Undivided Interest in Trust Represented by each MidCap SPDR:   1/63,321,051  
Record Date:   Quarterly, on the second (2nd) Business Day after the third Friday in each of March, June, September and December.  
Dividend Payment Dates:   Quarterly, on the last Business Day of April, July, October and January.  
Trustee's Annual Fee:   From 14/100 of one percent to 10/100 of one percent, based on net asset value of the Trust, as the same may be reduced by certain amounts, plus the Transaction Fee.  
Estimated Ordinary Operating Expenses of the Trust:   25/100 of one percent (inclusive of Trustee's annual fee)  
Net Asset Value per MidCap SPDR (based on the value of the securities, other net assets of the Trust and number of MidCap SPDR's outstanding):   $125.49  
Evaluation Time:   Closing time of the regular trading session on the New York Stock Exchange, Inc. (ordinarily 4:00 p.m. New York time).  
Licensor:   Standard & Poor's, a division of The McGraw-Hill Companies, Inc.  
Mandatory Termination Date:   The first to occur of (i) April 27, 2120 or (ii) the date 20 years after the death of the last survivor of eleven persons named in the Agreement, the oldest of whom was born in 1990 and the youngest of whom was born in 1993.  
Discretionary Termination:   Trust may be terminated if the value of the securities held by the Trust is less than $100,000,000, as such amount shall be adjusted for inflation.  

 

*  The Trust Agreement became effective and the initial deposit was made on April 27, 1995 (the "Initial Date of Deposit").


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MidCap SPDR Trust, Series 1
Frequency Distribution of Discounts and Premiums
Bid/Ask Price vs. Net Asset Value (NAV)
(Unaudited)

Five Year Period Ending 9/30/2009

Premium/Discount Range   Number of
Trading Days		   Percentage of
Total Trading Days		  
Greater than 0.25%      48       3.81 %  
Between zero and 0.25%      500       39.72 %  
Bid/Ask Price Equal to NAV      29       2.30 %  
Between zero and -0.25%      646       51.31 %  
Less than -0.25%      36       2.86 %  
Total:      1,259       100.00 %  

 

Comparision of Total Returns Based on NAV and Bid/Ask Price(1)(2)
From Inception to 9/30/09

Cumulative Total Return

    1 Year   5 Year   10 Year   Since
Inception		  
MidCap SPDR Trust, Series 1  
Return Based on NAV     (3.47 %)     23.01 %     99.32 %     326.92 %  
Return Based on Bid/Ask Price     (2.94 %)     23.10 %     99.21 %     326.92 %  
S&P MidCap 400 Index     (3.11 %)     24.80 %     105.67 %     349.91 %  

 

Average Annual Total Return

    1 Year   5 Year   10 Year   Since
Inception		  
MidCap SPDR Trust, Series 1  
Return Based on NAV     (3.47 %)     4.23 %     7.14 %     10.58 %  
Return Based on Bid/Ask Price     (2.94 %)     4.24 %     7.13 %     10.58 %  
S&P MidCap 400 Index     (3.11 %)     4.53 %     7.48 %     10.99 %  

 

(1)  The Bid/Ask Price is the midpoint of the Consolidated Bid/Ask price at the time the Trust's NAV is calculated. From 4/1/01 to 11/28/08, the Bid/Ask Price was the Bid/Ask price on NYSE Amex (formerly the American Stock Exchange), ordinarily 4:00 p.m. Prior to 4/3/01, the Bid/Ask Price was the Bid/Ask price on the close of trading on the American Stock Exchange, ordinarily 4:15 p.m.

(2)  Average Annual Return and Cumulative Total Return for the period since inception is calculated from the inception date of April 27, 1995.


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MidCap SPDR Trust, Series 1

Sponsor

PDR Services LLC
c/o NYSE Euronext
11 Wall Street
New York, NY 10005

Trustee

The Bank of New York Mellon
2 Hanson Place
Brooklyn, NY 11217

Distributor

ALPS Distributors, Inc.
1290 Broadway
Suite 1100
Denver, CO 80203

Independent Registered Public Accounting Firm

PricewaterhouseCoopers LLP
PricewaterhouseCoopers Center
300 Madison Avenue
New York, NY 10017

Legal Counsel

Katten Muchin Rosenman LLP
575 Madison Avenue
New York, NY 10022


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