FDVV - SPYD: Underperforming Dividend ETF Due To Sector Weighting

2024-05-24 11:31:53 ET

Summary

• The SPDR Portfolio S&P 500 High Dividend ETF is a middle-of-the-pack performer that lacks standout characteristics.
• The ETF has a current dividend yield of 4.4% and exposure to a diverse range of US companies.
• SPYD's sector allocation, particularly in real estate and utilities, leaves it vulnerable to interest rate changes and underperformance compared to peers.
• There is a lack of exposure to the technology sector. This hurts the potential capital appreciation compared to similar peer ETFs.

Overview

There are a ton of dividend focused ETFs out there to choose from but how do you know which one is best? Well, there are a few different metrics that we can look at, but it ultimately comes down to what your goal is. Maybe you want a diversified ETF that gives you a high starting yield. Or perhaps you are looking for an ETF that gives exposure to dividend paying companies and has a history of consistently increasing distributions? Do you want to focus on exclusively income capabilities, or are you looking for total return? These are some of the questions you have to ask yourself when looking for the perfect ETF....

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