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Should SPDR Portfolio S&P 500 High Dividend ETF (SPYD) Be on Your Investing Radar?
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The SPDR Portfolio S&P 500 High Dividend ETF (SPYD - Free Report) was launched on 10/21/2015, and is a passively managed exchange traded fund designed to offer broad exposure to the Large Cap Value segment of the US equity market.
The fund is sponsored by State Street Global Advisors. It has amassed assets over $427.47 M, making it one of the average sized ETFs attempting to match the Large Cap Value segment of the US equity market.
Why Large Cap Value
Companies that find themselves in the large cap category typically have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.
Carrying lower than average price-to-earnings and price-to-book ratios, value stocks also have lower than average sales and earnings growth rates. When you look at long-term performance, value stocks have outperformed growth stocks in nearly all markets. But in strong bull markets, growth stocks are more likely to be winners.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.07%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 3.99%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Real Estate sector--about 24.80% of the portfolio. Utilities and Consumer Discretionary round out the top three.
Looking at individual holdings, Seagate Technology Plc (STX - Free Report) accounts for about 1.49% of total assets, followed by Firstenergy Corp. (FE - Free Report) and Interpublic Group Of Companies Inc. (IPG - Free Report) .
The top 10 holdings account for about 13.91% of total assets under management.
Performance and Risk
SPYD 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.
The ETF has lost about -1.93% so far this year and was up about 7.73% in the last one year (as of 04/19/2018). In the past 52-week period, it has traded between $34.44 and $38.74.
The ETF has a beta of 0.77 and standard deviation of 12.27% for the trailing three-year period, making it a medium risk choice in the space. With about 82 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR Portfolio S&P 500 High Dividend ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, SPYD is a reasonable option for those seeking exposure to the Large Cap ETFs area of the market. Investors might also want to consider some other ETF options in the space.
The Vanguard Value ETF (VTV - Free Report) and the iShares Russell 1000 Value ETF (IWD - Free Report) track a similar index. While Vanguard Value ETF has $36.28 B in assets, iShares Russell 1000 Value ETF has $36.63 B. VTV has an expense ratio of 0.06% and IWD charges 0.20%.
Bottom-Line
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
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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Should SPDR Portfolio S&P 500 High Dividend ETF (SPYD) Be on Your Investing Radar?
The SPDR Portfolio S&P 500 High Dividend ETF (SPYD - Free Report) was launched on 10/21/2015, and is a passively managed exchange traded fund designed to offer broad exposure to the Large Cap Value segment of the US equity market.
The fund is sponsored by State Street Global Advisors. It has amassed assets over $427.47 M, making it one of the average sized ETFs attempting to match the Large Cap Value segment of the US equity market.
Why Large Cap Value
Companies that find themselves in the large cap category typically have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.
Carrying lower than average price-to-earnings and price-to-book ratios, value stocks also have lower than average sales and earnings growth rates. When you look at long-term performance, value stocks have outperformed growth stocks in nearly all markets. But in strong bull markets, growth stocks are more likely to be winners.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.07%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 3.99%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Real Estate sector--about 24.80% of the portfolio. Utilities and Consumer Discretionary round out the top three.
Looking at individual holdings, Seagate Technology Plc (STX - Free Report) accounts for about 1.49% of total assets, followed by Firstenergy Corp. (FE - Free Report) and Interpublic Group Of Companies Inc. (IPG - Free Report) .
The top 10 holdings account for about 13.91% of total assets under management.
Performance and Risk
SPYD 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.
The ETF has lost about -1.93% so far this year and was up about 7.73% in the last one year (as of 04/19/2018). In the past 52-week period, it has traded between $34.44 and $38.74.
The ETF has a beta of 0.77 and standard deviation of 12.27% for the trailing three-year period, making it a medium risk choice in the space. With about 82 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR Portfolio S&P 500 High Dividend ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, SPYD is a reasonable option for those seeking exposure to the Large Cap ETFs area of the market. Investors might also want to consider some other ETF options in the space.
The Vanguard Value ETF (VTV - Free Report) and the iShares Russell 1000 Value ETF (IWD - Free Report) track a similar index. While Vanguard Value ETF has $36.28 B in assets, iShares Russell 1000 Value ETF has $36.63 B. VTV has an expense ratio of 0.06% and IWD charges 0.20%.
Bottom-Line
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
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.