The SPDR Portfolio S&P 500 High Dividend ETF (SPYD) 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?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
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.
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.
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.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
Managed by State Street Global Advisors, SPYD has amassed assets over $6.19 billion, making it one of the larger ETFs in the Style Box - Large Cap Value. SPYD 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
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Annual operating expenses for SPYD are 0.07%, which makes it one of the least expensive products in the space.
It's 12-month trailing dividend yield comes in at 4.79%.
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.
For SPYD, it has heaviest allocation in the Real Estate sector --about 23.30% of the portfolio --while Utilities and Consumer Staples round out the top three.
When you look at individual holdings, Abbvie Inc (ABBV) accounts for about 1.58% of the fund's total assets, followed by Philip Morris International (PM) and Cvs Health Corp (CVS).
The top 10 holdings account for about 14.69% of total assets under management.
Performance and Risk
The ETF has lost about -6.89% so far this year and is up roughly 5.72% in the last one year (as of 04/11/2025). In the past 52-week period, it has traded between $38.10 and $47.32.
The ETF has a beta of 0.84 and standard deviation of 17.35% for the trailing three-year period, making it a medium risk choice in the space. With about 81 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 $63.22 billion in assets, Vanguard Value ETF has $122.70 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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SPDR Portfolio S&P 500 High Dividend ETF (SPYD): ETF Research Reports Philip Morris International Inc. (PM): Free Stock Analysis Report CVS Health Corporation (CVS): Free Stock Analysis Report AbbVie Inc. (ABBV): Free Stock Analysis Report Vanguard Value ETF (VTV): ETF Research Reports Schwab U.S. Dividend Equity ETF (SCHD): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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