FDVV - SPYD: A Deeply Flawed 4.81% Dividend Yielding S&P 500 ETF
2024-02-07 00:57:14 ET
Summary
- SPYD has a 4.81% estimated dividend yield, a low 0.07% expense ratio, and $6.55 billion in assets under management. While these are all great features, SPYD consistently underperforms.
- The reason is because SPYD doesn't screen for quality. Furthermore, its equal-weighting scheme assigns too much weight to the lowest-quality stocks, whereas market-cap-weighted ETFs generally don't do this.
- These quality differences are evident when evaluating SPYD's dividend safety and profit scores against alternatives like SCHD, HDV, and FDVV. These ETFs are much better for long-term investing.
- This article evaluates SPYD's performance and fundamentals against these three funds, and provides an update on last month's semi-annual reconstitution.