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Is SPDR Portfolio S&P 500 High Dividend ETF (SPYD) a Strong ETF Right Now?
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The SPDR Portfolio S&P 500 High Dividend ETF (SPYD - Free Report) made its debut on 10/21/2015, 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?
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.
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.
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
Because the fund has amassed over $6.29 billion, this makes it one of the larger ETFs in the Style Box - Large Cap Value. SPYD is managed by State Street Global Advisors. SPYD, 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.
Annual operating expenses for this ETF are 0.07%, making it one of the least expensive products in the space.
It's 12-month trailing dividend yield comes in at 4.27%.
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 Real Estate sector - about 27% of the portfolio. Financials and Utilities round out the top three.
Looking at individual holdings, Iron Mountain Inc (IRM - Free Report) accounts for about 1.66% of total assets, followed by Public Service Enterprise Gp (PEG - Free Report) and International Paper Co (IP - Free Report) .
Its top 10 holdings account for approximately 15.49% of SPYD's total assets under management.
Performance and Risk
So far this year, SPYD has added roughly 11.79%, and is up about 15.51% in the last one year (as of 07/29/2024). During this past 52-week period, the fund has traded between $33 and $42.95.
The ETF has a beta of 1.02 and standard deviation of 17.05% for the trailing three-year period, making it a medium risk choice in the space. With about 79 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.
Schwab U.S. Dividend Equity ETF (SCHD - Free Report) tracks Dow Jones U.S. Dividend 100 Index and the Vanguard Value ETF (VTV - Free Report) tracks CRSP U.S. Large Cap Value Index. Schwab U.S. Dividend Equity ETF has $58.41 billion in assets, Vanguard Value ETF has $120.54 billion. SCHD has an expense ratio of 0.06% 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?
The SPDR Portfolio S&P 500 High Dividend ETF (SPYD - Free Report) made its debut on 10/21/2015, 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?
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.
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.
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
Because the fund has amassed over $6.29 billion, this makes it one of the larger ETFs in the Style Box - Large Cap Value. SPYD is managed by State Street Global Advisors. SPYD, 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.
Annual operating expenses for this ETF are 0.07%, making it one of the least expensive products in the space.
It's 12-month trailing dividend yield comes in at 4.27%.
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 Real Estate sector - about 27% of the portfolio. Financials and Utilities round out the top three.
Looking at individual holdings, Iron Mountain Inc (IRM - Free Report) accounts for about 1.66% of total assets, followed by Public Service Enterprise Gp (PEG - Free Report) and International Paper Co (IP - Free Report) .
Its top 10 holdings account for approximately 15.49% of SPYD's total assets under management.
Performance and Risk
So far this year, SPYD has added roughly 11.79%, and is up about 15.51% in the last one year (as of 07/29/2024). During this past 52-week period, the fund has traded between $33 and $42.95.
The ETF has a beta of 1.02 and standard deviation of 17.05% for the trailing three-year period, making it a medium risk choice in the space. With about 79 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.
Schwab U.S. Dividend Equity ETF (SCHD - Free Report) tracks Dow Jones U.S. Dividend 100 Index and the Vanguard Value ETF (VTV - Free Report) tracks CRSP U.S. Large Cap Value Index. Schwab U.S. Dividend Equity ETF has $58.41 billion in assets, Vanguard Value ETF has $120.54 billion. SCHD has an expense ratio of 0.06% 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.