Making its debut on 10/21/2015, smart beta exchange traded fund State Street 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?
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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
SPYD is managed by State Street Investment Management, and this fund has amassed over $7.76 billion, which makes it one of the larger ETFs in the Style Box - Large Cap Value. Before fees and expenses, this particular fund 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
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.
Operating expenses on an annual basis are 0.07% for SPYD, making it one of the least expensive products in the space.
SPYD's 12-month trailing dividend yield is 4.07%.
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.
Representing 19.6% of the portfolio, the fund has heaviest allocation to the Real Estate sector; Consumer Staples and Financials round out the top three.
Taking into account individual holdings, Cvs Health Corp (CVS) accounts for about 1.74% of the fund's total assets, followed by Viatris Inc (VTRS) and Merck + Co. Inc. (MRK).
The top 10 holdings account for about 16.16% of total assets under management.
Performance and Risk
So far this year, SPYD has added roughly 11.14%, and is up about 13.54% in the last one year (as of 02/17/2026). During this past 52-week period, the fund has traded between $38.81 and $48.07.
The ETF has a beta of 0.79 and standard deviation of 14.97% 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
State Street 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 $84.14 billion in assets, Vanguard Value ETF has $169.89 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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State Street 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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