Is SPDR Portfolio S&P 500 High Dividend ETF (SPYD) a Strong ETF Right Now?

Launched on 10/21/2015, the SPDR Portfolio S&P 500 High Dividend ETF (SPYD) is a smart beta exchange traded fund offering broad exposure to the Style Box - Large Cap Value category of the market.

What Are Smart Beta ETFs?

Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.

A good option for investors who believe in market efficiency, market cap weighted indexes offer 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.

This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of 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, and has been able to amass over $6.87 billion, which makes it one of the larger ETFs in the Style Box - Large Cap Value. This particular fund 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

Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.

Annual operating expenses for SPYD are 0.07%, which makes it one of the least expensive products in the space.

SPYD's 12-month trailing dividend yield is 4.48%.

Sector Exposure and Top Holdings

ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.

SPYD's heaviest allocation is in the Real Estate sector, which is about 22.4% of the portfolio. Its Utilities and Financials round out the top three.

Taking into account individual holdings, Philip Morris International (PM) accounts for about 1.85% of the fund's total assets, followed by Hasbro Inc (HAS) and Franklin Resources Inc (BEN).

The top 10 holdings account for about 15.78% of total assets under management.

Performance and Risk

The ETF return is roughly 1.41% so far this year and it's up approximately 4.77% in the last one year (as of 08/12/2025). In the past 52-week period, it has traded between $38.81 and $47.32

SPYD has a beta of 0.83 and standard deviation of 16.69% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 80 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) 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 $69.78 billion in assets, Vanguard Value ETF has $139.64 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

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This article originally published on Zacks Investment Research (zacks.com).

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