Making its debut on 10/21/2015, smart beta exchange traded fund SPDR Portfolio S&P 500 High Dividend ETF (SPYD) provides investors 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.
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.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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 sponsored by State Street Investment Management. It has amassed assets over $7.13 billion, making it one of the larger ETFs in the Style Box - Large Cap Value. 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
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.07% for SPYD, making it one of the least expensive products in the space.
The fund has a 12-month trailing dividend yield of 4.59%.
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.
SPYD's heaviest allocation is in the Real Estate sector, which is about 21.9% of the portfolio. Its Consumer Staples and Financials round out the top three.
Taking into account individual holdings, Cvs Health Corp (CVS) accounts for about 1.58% of the fund's total assets, followed by Apa Corp (APA) and Abbvie Inc (ABBV).
SPYD's top 10 holdings account for about 14.05% of its total assets under management.
Performance and Risk
The ETF has added about 1.78% so far this year and is down about -0.44% in the last one year (as of 10/13/2025). In the past 52-week period, it has traded between $38.81 and $47.32
SPYD has a beta of 0.84 and standard deviation of 15.90% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 83 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 $69.48 billion in assets, Vanguard Value ETF has $146.77 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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SPDR Portfolio S&P 500 High Dividend ETF (SPYD): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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