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Is SPDR Portfolio S&P 500 High Dividend ETF (SPYD) a Strong ETF Right Now?
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Designed to provide broad exposure to the Style Box - Large Cap Value category of the market, the SPDR Portfolio S&P 500 High Dividend ETF (SPYD - Free Report) is a smart beta exchange traded fund launched on 10/21/2015.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is managed by State Street Global Advisors, and has been able to amass over $8.09 billion, which makes it one of the larger ETFs in the Style Box - Large Cap Value. Before fees and expenses, SPYD seeks to match the performance of the S&P 500 High Dividend Index.
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.
With one of the least expensive products in the space, this ETF has annual operating expenses of 0.07%.
It has a 12-month trailing dividend yield of 4.71%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
For SPYD, it has heaviest allocation in the Financials sector --about 22.70% of the portfolio --while Real Estate and Utilities round out the top three.
Looking at individual holdings, Gilead Sciences Inc. (GILD - Free Report) accounts for about 1.82% of total assets, followed by Principal Financial Group Inc. (PFG - Free Report) and Cardinal Health Inc. (CAH - Free Report) .
The top 10 holdings account for about 14.29% of total assets under management.
Performance and Risk
The ETF has added roughly 6.42% and is up about 2.66% so far this year and in the past one year (as of 02/07/2023), respectively. SPYD has traded between $35.47 and $45.45 during this last 52-week period.
The ETF has a beta of 0.99 and standard deviation of 29.88% 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 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 $53.54 billion in assets, Vanguard Value ETF has $101.54 billion. IWD has an expense ratio of 0.18% 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?
Designed to provide broad exposure to the Style Box - Large Cap Value category of the market, the SPDR Portfolio S&P 500 High Dividend ETF (SPYD - Free Report) is a smart beta exchange traded fund launched on 10/21/2015.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is managed by State Street Global Advisors, and has been able to amass over $8.09 billion, which makes it one of the larger ETFs in the Style Box - Large Cap Value. Before fees and expenses, SPYD seeks to match the performance of the S&P 500 High Dividend Index.
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.
With one of the least expensive products in the space, this ETF has annual operating expenses of 0.07%.
It has a 12-month trailing dividend yield of 4.71%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
For SPYD, it has heaviest allocation in the Financials sector --about 22.70% of the portfolio --while Real Estate and Utilities round out the top three.
Looking at individual holdings, Gilead Sciences Inc. (GILD - Free Report) accounts for about 1.82% of total assets, followed by Principal Financial Group Inc. (PFG - Free Report) and Cardinal Health Inc. (CAH - Free Report) .
The top 10 holdings account for about 14.29% of total assets under management.
Performance and Risk
The ETF has added roughly 6.42% and is up about 2.66% so far this year and in the past one year (as of 02/07/2023), respectively. SPYD has traded between $35.47 and $45.45 during this last 52-week period.
The ETF has a beta of 0.99 and standard deviation of 29.88% 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 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 $53.54 billion in assets, Vanguard Value ETF has $101.54 billion. IWD has an expense ratio of 0.18% 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.