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Is State Street SPDR S&P Dividend ETF (SDY) a Strong ETF Right Now?
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Making its debut on 11/08/2005, smart beta exchange traded fund State Street SPDR S&P Dividend ETF (SDY - Free Report) provides investors 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.
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.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
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
Managed by State Street Investment Management, SDY has amassed assets over $21.32 billion, making it one of the largest ETFs in the Style Box - Large Cap Value. Before fees and expenses, SDY seeks to match the performance of the S&P High Yield Dividend Aristocrats Index.
The S&P High Yield Dividend Aristocrats Index measures the performance of the highest dividend yielding S&P Composite 1500 Index constituents that have followed a managed-dividends policy of consistently increasing dividends every year for at least 20 consecutive years.
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.
Operating expenses on an annual basis are 0.35% for this ETF, which makes it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 2.42%.
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.
For SDY, it has heaviest allocation in the Industrials sector --about 19.6% of the portfolio --while Consumer Staples and Utilities round out the top three.
When you look at individual holdings, Verizon Communications Inc (VZ) accounts for about 2.81% of the fund's total assets, followed by Realty Income Corp (O) and Target Corp (TGT).
The top 10 holdings account for about 18.53% of total assets under management.
Performance and Risk
Year-to-date, the State Street SPDR S&P Dividend ETF return is roughly 8.12% so far, and is up roughly 14.95% over the last 12 months (as of 02/04/2026). SDY has traded between $121.58 $150.46 in this past 52-week period.
The fund has a beta of 0.76 and standard deviation of 12.47% for the trailing three-year period, which makes SDY a medium risk choice in this particular space. With about 152 holdings, it effectively diversifies company-specific risk .
Alternatives
State Street SPDR S&P Dividend ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
Schwab U.S. Dividend Equity ETF (SCHD) tracks Dow Jones U.S. Dividend 100 Index and the Vanguard Value ETF (VTV) tracks CRSP U.S. Large Cap Value Index. Schwab U.S. Dividend Equity ETF has $80.18 billion in assets, Vanguard Value ETF has $167.01 billion. SCHD has an expense ratio of 0.06% and VTV changes 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 State Street SPDR S&P Dividend ETF (SDY) a Strong ETF Right Now?
Making its debut on 11/08/2005, smart beta exchange traded fund State Street SPDR S&P Dividend ETF (SDY - Free Report) provides investors 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.
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.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
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
Managed by State Street Investment Management, SDY has amassed assets over $21.32 billion, making it one of the largest ETFs in the Style Box - Large Cap Value. Before fees and expenses, SDY seeks to match the performance of the S&P High Yield Dividend Aristocrats Index.
The S&P High Yield Dividend Aristocrats Index measures the performance of the highest dividend yielding S&P Composite 1500 Index constituents that have followed a managed-dividends policy of consistently increasing dividends every year for at least 20 consecutive years.
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.
Operating expenses on an annual basis are 0.35% for this ETF, which makes it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 2.42%.
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.
For SDY, it has heaviest allocation in the Industrials sector --about 19.6% of the portfolio --while Consumer Staples and Utilities round out the top three.
When you look at individual holdings, Verizon Communications Inc (VZ) accounts for about 2.81% of the fund's total assets, followed by Realty Income Corp (O) and Target Corp (TGT).
The top 10 holdings account for about 18.53% of total assets under management.
Performance and Risk
Year-to-date, the State Street SPDR S&P Dividend ETF return is roughly 8.12% so far, and is up roughly 14.95% over the last 12 months (as of 02/04/2026). SDY has traded between $121.58 $150.46 in this past 52-week period.
The fund has a beta of 0.76 and standard deviation of 12.47% for the trailing three-year period, which makes SDY a medium risk choice in this particular space. With about 152 holdings, it effectively diversifies company-specific risk .
Alternatives
State Street SPDR S&P Dividend ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
Schwab U.S. Dividend Equity ETF (SCHD) tracks Dow Jones U.S. Dividend 100 Index and the Vanguard Value ETF (VTV) tracks CRSP U.S. Large Cap Value Index. Schwab U.S. Dividend Equity ETF has $80.18 billion in assets, Vanguard Value ETF has $167.01 billion. SCHD has an expense ratio of 0.06% and VTV changes 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.