We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Should SPDR Portfolio S&P 500 High Dividend ETF (SPYD) Be on Your Investing Radar?
Read MoreHide Full Article
Launched on 10/21/2015, the SPDR Portfolio S&P 500 High Dividend ETF (SPYD - Free Report) is a passively managed exchange traded fund designed to provide a 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 $5.20 billion, 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.
Value stocks are known for their lower than average price-to-earnings and price-to-book ratios, but investors should also note their 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
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
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 5.01%.
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.
This ETF has heaviest allocation to the Financials sector--about 17.90% of the portfolio. Utilities and Real Estate round out the top three.
Looking at individual holdings, Comerica Incorporated (CMA - Free Report) accounts for about 1.58% of total assets, followed by Baker Hughes Company Class A (BKR - Free Report) and Regions Financial Corporation (RF - Free Report) .
The top 10 holdings account for about 15.02% 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 return is roughly 29.39% so far this year and was up about 24.75% in the last one year (as of 12/07/2021). In the past 52-week period, it has traded between $32.15 and $42.51.
The ETF has a beta of 1.09 and standard deviation of 28.60% for the trailing three-year period, making it a medium risk choice in the space. With about 81 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR Portfolio S&P 500 High Dividend ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, SPYD is a great option for investors seeking exposure to the Style Box - Large Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.
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 $56.90 billion in assets, Vanguard Value ETF has $87.85 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds 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.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Should SPDR Portfolio S&P 500 High Dividend ETF (SPYD) Be on Your Investing Radar?
Launched on 10/21/2015, the SPDR Portfolio S&P 500 High Dividend ETF (SPYD - Free Report) is a passively managed exchange traded fund designed to provide a 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 $5.20 billion, 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.
Value stocks are known for their lower than average price-to-earnings and price-to-book ratios, but investors should also note their 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
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
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 5.01%.
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.
This ETF has heaviest allocation to the Financials sector--about 17.90% of the portfolio. Utilities and Real Estate round out the top three.
Looking at individual holdings, Comerica Incorporated (CMA - Free Report) accounts for about 1.58% of total assets, followed by Baker Hughes Company Class A (BKR - Free Report) and Regions Financial Corporation (RF - Free Report) .
The top 10 holdings account for about 15.02% 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 return is roughly 29.39% so far this year and was up about 24.75% in the last one year (as of 12/07/2021). In the past 52-week period, it has traded between $32.15 and $42.51.
The ETF has a beta of 1.09 and standard deviation of 28.60% for the trailing three-year period, making it a medium risk choice in the space. With about 81 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR Portfolio S&P 500 High Dividend ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, SPYD is a great option for investors seeking exposure to the Style Box - Large Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.
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 $56.90 billion in assets, Vanguard Value ETF has $87.85 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds 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.