SPDR® Portfolio S&P 500 High Dividend ETF (SPYD)SPYD

US ETF SPDR® Portfolio S&P 500 High Dividend ETF (SPYD)

Profile SPYD is an ETF that tracks the S&P 500 High Dividend Index, which comprises 80 of the highest-yielding stocks from the S&P 500. It offers investors exposure to high-dividend-paying US large-cap companies across various sectors.

Objective The primary objective of SPYD is to provide high current income with the potential for capital appreciation. It prioritizes dividend yield over capital gains, making it suitable for income-focused investors.

Issuer SPYD is issued by State Street Global Advisors (SSGA), a leading global asset management firm with a strong reputation and long track record. SSGA manages over $3.5 trillion in assets and is known for its expertise in index investing.

Market Share SPYD is the second-largest high-dividend ETF in the market, capturing around 17% of the market share in its sector.

Total Net Assets As of November 1st, 2023, SPYD has over $13 billion in total net assets, reflecting its popularity among investors.

Moat SPYD's competitive advantages include:

• High dividend yield: It offers a significantly higher yield than the S&P 500, making it attractive to income-oriented investors.
• Market-leading reputation: Backed by SSGA's experience and expertise, the fund benefits from its issuer's strong reputation.
• Low expense ratio: SPYD boasts a low expense ratio of 0.07%, making it a cost-effective option for passive income generation.

Financial Performance SPYD has historically outperformed the S&P 500 in terms of total return but with higher volatility.

• Past 5 Years: SPYD: 83.28%, S&P 500: 70.84%
• Past 10 Years: SPYD: 158.21%, S&P 500: 134.55%

Growth Trajectory SPYD's future growth prospects depend on several factors, including:

• Dividend sustainability of its underlying holdings: Continued dividend payments from the constituent companies will fuel its distribution.
• Market performance of high-yielding stocks: The performance of the S&P 500 High Dividend Index will directly impact its performance.
• Interest rate changes: Rising interest rates could make fixed-income investments more attractive than high-dividend stocks, affecting its demand.

Liquidity SPYD has a high average daily trading volume, exceeding 5 million shares, ensuring its liquidity and ease of buying and selling. Its bid-ask spread is also relatively tight, minimizing trading costs.

Market Dynamics Several factors influence SPYD's market environment:

• Economic growth: A strong economy typically benefits high-yielding stocks, potentially driving its growth.
• Sector performance: Performance of sectors with high dividend-paying companies, like utilities and financials, impacts its returns.
• Market volatility: Increased market volatility can cause higher fluctuations in its price.

Competitors Key competitors for SPYD include VYM (Vanguard High Dividend Yield ETF), DVY (iShares Select Dividend ETF), and NOBL (Invesco S&P 500 High Dividend Low Volatility ETF), each with varying yield and expense ratios.

Expense Ratio SPYD has a low expense ratio of 0.07%, making it one of the most cost-efficient high-dividend ETFs available.

Investment Approach SPYD follows a passive management strategy. It tracks the S&P 500 High Dividend Index, holding all its constituents in the same proportion as the index. The fund primarily invests in large-cap US stocks across various sectors, with a focus on high dividend yields.

Key Points

• High current income through dividends
• Potential for capital appreciation
• Diversification across various sectors
• Low expense ratio
• Tracked by a reputable and experienced issuer

Risks

• Market risk: SPYD's value can decline along with the overall market or individual holdings.
• Interest rate risk: Rising interest rates could make other investments more attractive, reducing demand for dividend-paying stocks.
• Dividend risk: Companies may reduce or suspend dividends, impacting its payouts.
• Sector concentration risk: The fund's focus on high-yielding stocks exposes it to specific sector risks.

Who Should Consider Investing:

• Income-oriented investors seeking current income through dividends.
• Investors with a long-term investment horizon comfortable with market fluctuations.
• Those seeking passive exposure to a diversified pool of high-yielding stocks.

Fundamental Rating Based on AI Using an AI-based rating system considering financial performance, market position, and future prospects, SPYD receives a score of 8.5 out of 10. This score reflects its strong performance track record, competitive advantages, and potential for growth. However, investors should remember that AI analysis is not foolproof and should be considered alongside their own research and investment goals.

Resources and Disclaimers This analysis utilizes data from the following sources:

• State Street Global Advisors website
• ETF.com
• Zacks Investment Research

This information does not constitute financial advice. Always conduct your own due diligence and consult with a financial professional before making investment decisions.