SPDR Portfolio S&P 500 High Dividend ETF (SPYD): How to Buy

The SPDR Portfolio S&P 500 High Dividend ETF (SPYD -1.02%) offers a simple way for investors to target the highest-yielding large-cap U.S. stocks in a relatively diversified and low-cost manner. But before buying this dividend exchange-traded fund (ETF), it's important to look beyond the surface-level details and understand how it works and what it holds. Here's what you need to know.

Overview

What is the SPDR Portfolio S&P 500 High Dividend ETF?

The SPDR Portfolio S&P 500 High Dividend ETF is an exchange-traded fund that tracks the S&P 500 High Dividend Index, offering investors exposure to some of the highest-yielding stocks within the S&P 500. The selection process starts with the S&P 500, which already screens for company size, earnings quality, liquidity, and domestic revenue, with input from an index committee.

The SPDR Portfolio S&P 500 High Dividend ETF then narrows it down to the 80 highest-yielding companies within the index. Once selected, the ETF weights each stock equally and rebalances twice a year.

How to buy

How to buy the SPDR Portfolio S&P 500 High Dividend ETF

If you've decided to invest in the SPDR Portfolio S&P 500 High Dividend ETF, follow these steps to purchase shares through your brokerage account:

1. Open your brokerage app. Log in to your brokerage account where you handle your investments.
2. Search for the ETF. Enter the stock ticker SPYD or the ETF's full name into the search bar to bring up its trading page.
3. Decide how many shares to buy. Consider your investment goals and how much of your portfolio you want to allocate to this ETF.
4. Select an order type. Choose between a market order to buy at the current price or a limit order to specify the maximum price you're willing to pay.
5. Submit your order. Confirm the details and submit your buy order.
6. Review your purchase. Check your portfolio to ensure your order was filled as expected and adjust your investment strategy accordingly.

Holdings

Holdings of SPDR Portfolio S&P 500 High Dividend ETF

The SPDR Portfolio S&P 500 High Dividend ETF holds 80 stocks, but its holdings change fairly frequently since the ETF rebalances semiannually. This process is known as turnover, which refers to how often the fund replaces its holdings. In 2024, the ETF had a turnover rate of 43%, meaning almost half of its portfolio changed over the course of the year.

Because the SPDR Portfolio S&P 500 High Dividend ETF equally weights its holdings, the top stocks at any given time are simply those that have outperformed since the last rebalance. This is important to keep in mind since leadership within the fund can shift significantly between adjustments.

Currently, this ETF is overweighted to the real estate, utilities, and financials sectors. As of mid-February 2025, the top holdings in SPDR Portfolio S&P 500 High Dividend ETF were:

1. Philip Morris International (PM 0.28%): 1.45%
2. AbbVie (ABBV -2.97%): 1.41%
3. AT&T (T -1.85%): 1.38%
4. Camden Property Trust (CPT -0.97%): 1.36%
5. Eversource Energy (ES 0.24%): 1.35%
6. Consolidated Edison (ED -0.18%): 1.34%
7. Exelon (EXC -0.47%): 1.33%
8. Invesco (IVZ -3.29%): 1.33%
9. Mid-America Apartment Communities (MAA -0.57%): 1.33%
10. UDR (UDR -0.41%): 1.32%

Should I invest?

Should I Invest in SPDR Portfolio S&P 500 High Dividend ETF?

If your original strategy was to pick the highest-yielding stocks from the market, the SPDR Portfolio S&P 500 High Dividend ETF can automate that process for you. The ETF draws from a strong starting universe by selecting stocks from the S&P 500, ensuring companies meet baseline criteria for size, earnings quality, and liquidity.

It also handles the heavy lifting of screening for dividend yield and rebalancing twice a year. However, the SPDR Portfolio S&P 500 High Dividend ETF's strategy is very one-dimensional, focusing purely on yield chasing. The ETF does not screen for dividend safety, meaning it does not consider how sustainable a company's dividend is or whether it has grown over time.

Dividends

Does SPDR Portfolio S&P 500 High Dividend ETF pay a dividend?

Yes, the SPDR Portfolio S&P 500 High Dividend ETF pays a dividend. As of mid-February 2025, it had a 4.41% 30-day Securities and Exchange Commission (SEC) yield and distributed payouts quarterly. However, not all of its dividends are qualified; the fund holds real estate investment trusts (REITs), which distribute ordinary income that may be taxed at a higher rate.

Expense ratio

What is SPDR Portfolio S&P 500 High Dividend ETF's expense ratio?

The SPDR Portfolio S&P 500 High Dividend ETF has an expense ratio of 0.07%, meaning investors pay $7 annually for every $10,000 invested. This fee is not paid directly but is deducted from the ETF's returns over time, which can slightly reduce an ETF's long-term performance.

This is considered very low for a dividend-focused ETF and is at the cheaper end of the spectrum compared to similar funds. Lower fees mean more of your dividend income stays in your pocket.

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Performance

Historical performance of SPDR Portfolio S&P 500 High Dividend ETF

Here's a look at the SPDR Portfolio S&P 500 High Dividend ETF's annualized total return (i.e., with dividends reinvested) over various trailing periods as of Jan. 31, 2025:

The bottom line

Beginner investors looking for income will appreciate the SPDR Portfolio S&P 500 High Dividend ETF for its straightforward index methodology and above-average dividend yield. However, its quarterly payout schedule may be less appealing for those who prefer monthly distributions.

Dividend ETF investors who focus on quality and dividend growth may find the SPDR Portfolio S&P 500 High Dividend ETF too one-dimensional, as it prioritizes yield over sustainability. That said, the ETF is refreshingly inexpensive, with a low expense ratio, meaning high fees won't be a drag on performance over time.

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