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Is SPDR Portfolio S&P 500 High Dividend ETF (SPYD) a Strong ETF Right Now?
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The SPDR Portfolio S&P 500 High Dividend ETF (SPYD - Free Report) made its debut on 10/21/2015, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Because the fund has amassed over $6.81 billion, this makes it one of the larger ETFs in the Style Box - Large Cap Value. SPYD is managed by State Street Global Advisors. This particular fund seeks to match the performance of the S&P 500 High Dividend Index before fees and expenses.
The S&P 500 High Dividend Index is designed to measure the performance of the top 80 dividend-paying securities listed on the S&P 500 Index, based on dividend yield.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.07%, making it one of the least expensive products in the space.
It's 12-month trailing dividend yield comes in at 4.68%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
SPYD's heaviest allocation is in the Financials sector, which is about 24.40% of the portfolio. Its Real Estate and Utilities round out the top three.
Looking at individual holdings, Seagate Technology Holdings (STX - Free Report) accounts for about 1.79% of total assets, followed by Nrg Energy Inc (NRG - Free Report) and Keycorp (KEY - Free Report) .
Its top 10 holdings account for approximately 15.32% of SPYD's total assets under management.
Performance and Risk
The ETF has lost about -0.36% and is down about -1.38% so far this year and in the past one year (as of 01/12/2024), respectively. SPYD has traded between $33 and $43.09 during this last 52-week period.
The fund has a beta of 1.04 and standard deviation of 17.76% for the trailing three-year period, which makes SPYD a medium risk choice in this particular space. With about 80 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR Portfolio S&P 500 High Dividend ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
IShares Russell 1000 Value ETF (IWD - Free Report) tracks Russell 1000 Value Index and the Vanguard Value ETF (VTV - Free Report) tracks CRSP U.S. Large Cap Value Index. IShares Russell 1000 Value ETF has $53.37 billion in assets, Vanguard Value ETF has $106 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Value.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Is SPDR Portfolio S&P 500 High Dividend ETF (SPYD) a Strong ETF Right Now?
The SPDR Portfolio S&P 500 High Dividend ETF (SPYD - Free Report) made its debut on 10/21/2015, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Because the fund has amassed over $6.81 billion, this makes it one of the larger ETFs in the Style Box - Large Cap Value. SPYD is managed by State Street Global Advisors. This particular fund seeks to match the performance of the S&P 500 High Dividend Index before fees and expenses.
The S&P 500 High Dividend Index is designed to measure the performance of the top 80 dividend-paying securities listed on the S&P 500 Index, based on dividend yield.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.07%, making it one of the least expensive products in the space.
It's 12-month trailing dividend yield comes in at 4.68%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
SPYD's heaviest allocation is in the Financials sector, which is about 24.40% of the portfolio. Its Real Estate and Utilities round out the top three.
Looking at individual holdings, Seagate Technology Holdings (STX - Free Report) accounts for about 1.79% of total assets, followed by Nrg Energy Inc (NRG - Free Report) and Keycorp (KEY - Free Report) .
Its top 10 holdings account for approximately 15.32% of SPYD's total assets under management.
Performance and Risk
The ETF has lost about -0.36% and is down about -1.38% so far this year and in the past one year (as of 01/12/2024), respectively. SPYD has traded between $33 and $43.09 during this last 52-week period.
The fund has a beta of 1.04 and standard deviation of 17.76% for the trailing three-year period, which makes SPYD a medium risk choice in this particular space. With about 80 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR Portfolio S&P 500 High Dividend ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
IShares Russell 1000 Value ETF (IWD - Free Report) tracks Russell 1000 Value Index and the Vanguard Value ETF (VTV - Free Report) tracks CRSP U.S. Large Cap Value Index. IShares Russell 1000 Value ETF has $53.37 billion in assets, Vanguard Value ETF has $106 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Value.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.