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.
Is SPDR Portfolio S&P 500 High Dividend ETF (SPYD) a Strong ETF Right Now?
Read MoreHide Full Article
The SPDR Portfolio S&P 500 High Dividend ETF (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?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Because the fund has amassed over $6.82 billion, this makes it one of the larger ETFs in the Style Box - Large Cap Value. SPYD is managed by State Street Global Advisors. This particular fund, before fees and expenses, 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
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 cousins, other things remaining the same.
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 4.51%.
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.
SPYD's heaviest allocation is in the Financials sector, which is about 24.60% of the portfolio. Its Real Estate and Utilities round out the top three.
Taking into account individual holdings, Ford Motor Co (F - Free Report) accounts for about 1.44% of the fund's total assets, followed by Iron Mountain Inc (IRM - Free Report) and Hasbro Inc (HAS - Free Report) .
The top 10 holdings account for about 14.06% of total assets under management.
Performance and Risk
The ETF return is roughly 3.48% so far this year and is up about 16.32% in the last one year (as of 05/24/2024). In the past 52-week period, it has traded between $33 and $41.42.
The fund has a beta of 1.03 and standard deviation of 17.40% for the trailing three-year period, which makes SPYD a medium risk choice in this particular space. With about 81 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 $55.45 billion in assets, Vanguard Value ETF has $114.89 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.
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.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Is SPDR Portfolio S&P 500 High Dividend ETF (SPYD) a Strong ETF Right Now?
The SPDR Portfolio S&P 500 High Dividend ETF (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?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Because the fund has amassed over $6.82 billion, this makes it one of the larger ETFs in the Style Box - Large Cap Value. SPYD is managed by State Street Global Advisors. This particular fund, before fees and expenses, 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
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 cousins, other things remaining the same.
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 4.51%.
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.
SPYD's heaviest allocation is in the Financials sector, which is about 24.60% of the portfolio. Its Real Estate and Utilities round out the top three.
Taking into account individual holdings, Ford Motor Co (F - Free Report) accounts for about 1.44% of the fund's total assets, followed by Iron Mountain Inc (IRM - Free Report) and Hasbro Inc (HAS - Free Report) .
The top 10 holdings account for about 14.06% of total assets under management.
Performance and Risk
The ETF return is roughly 3.48% so far this year and is up about 16.32% in the last one year (as of 05/24/2024). In the past 52-week period, it has traded between $33 and $41.42.
The fund has a beta of 1.03 and standard deviation of 17.40% for the trailing three-year period, which makes SPYD a medium risk choice in this particular space. With about 81 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 $55.45 billion in assets, Vanguard Value ETF has $114.89 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.
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.