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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 $495.39 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
Large cap companies usually 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.
While value stocks have lower than average price-to-earnings and price-to-book ratios, they also have lower than average sales and earnings growth rates. Considering long-term performance, value stocks have outperformed growth stocks in almost all markets; however, they are more likely to underperform growth stocks in strong bull markets.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts 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 has a 12-month trailing dividend yield of 4.02%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Real Estate sector--about 25.30% of the portfolio. Utilities and Consumer Discretionary round out the top three.
Looking at individual holdings, Valero Energy Corporation (VLO - Free Report) accounts for about 1.50% of total assets, followed by Macy's Inc (M - Free Report) and Aes Corporation (AES - Free Report) .
The top 10 holdings account for about 14.36% 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 -2.51% so far this year and was up about 8.67% in the last one year (as of 05/16/2018). 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 12.21% 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 sufficient 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 iShares Russell 1000 Value ETF (IWD - Free Report) and the Vanguard Value ETF (VTV - Free Report) track a similar index. While iShares Russell 1000 Value ETF has $36.53 B in assets, Vanguard Value ETF has $36.15 B. IWD has an expense ratio of 0.20% and VTV charges 0.05%.
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 $495.39 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
Large cap companies usually 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.
While value stocks have lower than average price-to-earnings and price-to-book ratios, they also have lower than average sales and earnings growth rates. Considering long-term performance, value stocks have outperformed growth stocks in almost all markets; however, they are more likely to underperform growth stocks in strong bull markets.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts 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 has a 12-month trailing dividend yield of 4.02%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Real Estate sector--about 25.30% of the portfolio. Utilities and Consumer Discretionary round out the top three.
Looking at individual holdings, Valero Energy Corporation (VLO - Free Report) accounts for about 1.50% of total assets, followed by Macy's Inc (M - Free Report) and Aes Corporation (AES - Free Report) .
The top 10 holdings account for about 14.36% 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 -2.51% so far this year and was up about 8.67% in the last one year (as of 05/16/2018). 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 12.21% 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 sufficient 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 iShares Russell 1000 Value ETF (IWD - Free Report) and the Vanguard Value ETF (VTV - Free Report) track a similar index. While iShares Russell 1000 Value ETF has $36.53 B in assets, Vanguard Value ETF has $36.15 B. IWD has an expense ratio of 0.20% and VTV charges 0.05%.
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.