The SPDR Portfolio S&P 500 High Dividend ETF (
SPYD Quick Quote SPYD - Free Report) was launched on 10/21/2015, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Large Cap Value category of the market. What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
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. SPYD has been able to amass assets over $5.94 billion, making it one of the larger ETFs in the Style Box - Large Cap Value. 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.
Cost & Other Expenses
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Operating expenses on an annual basis are 0.07% for this ETF, which makes it one of the least expensive products in the space.
SPYD's 12-month trailing dividend yield is 5.28%.
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 in the Financials sector - about 21.80% of the portfolio. Real Estate and Utilities round out the top three.
Taking into account individual holdings, Amgen Inc (
AMGN Quick Quote AMGN - Free Report) accounts for about 1.70% of the fund's total assets, followed by Seagate Technology Holdings ( STX Quick Quote STX - Free Report) and Packaging Corp Of America ( PKG Quick Quote PKG - Free Report) .
SPYD's top 10 holdings account for about 15.18% of its total assets under management.
Performance and Risk
The ETF has lost about -10.63% so far this year and is down about -7.12% in the last one year (as of 11/10/2023). In the past 52-week period, it has traded between $33 and $43.09.
SPYD has a beta of 1.02 and standard deviation of 18.18% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 82 holdings, it effectively diversifies company-specific risk.
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 Quick Quote IWD - Free Report) tracks Russell 1000 Value Index and the Vanguard Value ETF ( VTV Quick Quote VTV - Free Report) tracks CRSP U.S. Large Cap Value Index. IShares Russell 1000 Value ETF has $47.67 billion in assets, Vanguard Value ETF has $95.99 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.
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.