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Is State Street SPDR S&P Dividend ETF (SDY) a Strong ETF Right Now?
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The State Street SPDR S&P Dividend ETF (SDY - Free Report) made its debut on 11/08/2005, and is a smart beta exchange traded fund that provides 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 work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
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
The fund is managed by State Street Investment Management. SDY has been able to amass assets over $21.06 billion, making it one of the largest ETFs in the Style Box - Large Cap Value. This particular fund seeks to match the performance of the S&P High Yield Dividend Aristocrats Index before fees and expenses.
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
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 0.35% for SDY, making it on par with most peer products in the space.
SDY's 12-month trailing dividend yield is 2.48%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Industrials sector - about 18.7% of the portfolio. Consumer Staples and Utilities round out the top three.
Taking into account individual holdings, Verizon Communications Inc (VZ) accounts for about 3.6% of the fund's total assets, followed by Realty Income Corp (O) and Target Corp (TGT).
Its top 10 holdings account for approximately 20.07% of SDY's total assets under management.
Performance and Risk
The ETF has gained about 7.46% so far this year and it's up approximately 18.71% in the last one year (as of 04/10/2026). In the past 52-week period, it has traded between $127.39 and $155.93
The ETF has a beta of 0.74 and standard deviation of 12.15% for the trailing three-year period, making it a medium risk choice in the space. With about 158 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 Index Fund ETF Shares (VTV) tracks CRSP U.S. Large Cap Value Index. Schwab U.S. Dividend Equity ETF has $86.04 billion in assets, Vanguard Value Index Fund ETF Shares has $169.52 billion. SCHD has an expense ratio of 0.06% and VTV changes 0.03%.
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?
The State Street SPDR S&P Dividend ETF (SDY - Free Report) made its debut on 11/08/2005, and is a smart beta exchange traded fund that provides 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 work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
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
The fund is managed by State Street Investment Management. SDY has been able to amass assets over $21.06 billion, making it one of the largest ETFs in the Style Box - Large Cap Value. This particular fund seeks to match the performance of the S&P High Yield Dividend Aristocrats Index before fees and expenses.
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
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 0.35% for SDY, making it on par with most peer products in the space.
SDY's 12-month trailing dividend yield is 2.48%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Industrials sector - about 18.7% of the portfolio. Consumer Staples and Utilities round out the top three.
Taking into account individual holdings, Verizon Communications Inc (VZ) accounts for about 3.6% of the fund's total assets, followed by Realty Income Corp (O) and Target Corp (TGT).
Its top 10 holdings account for approximately 20.07% of SDY's total assets under management.
Performance and Risk
The ETF has gained about 7.46% so far this year and it's up approximately 18.71% in the last one year (as of 04/10/2026). In the past 52-week period, it has traded between $127.39 and $155.93
The ETF has a beta of 0.74 and standard deviation of 12.15% for the trailing three-year period, making it a medium risk choice in the space. With about 158 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 Index Fund ETF Shares (VTV) tracks CRSP U.S. Large Cap Value Index. Schwab U.S. Dividend Equity ETF has $86.04 billion in assets, Vanguard Value Index Fund ETF Shares has $169.52 billion. SCHD has an expense ratio of 0.06% and VTV changes 0.03%.
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.