The SPDR Portfolio S&P 500 High Dividend ETF Owns Some High-Risk Dividend Stocks – Is It Still Worth Buying?
With a dividend yield of around 4.4%, the SPDR Portfolio S 500 High Dividend ETF (NYSEMKT: SPYD) lives up to its name. For comparison, the SPDR S 500 ETF Trust (NYSEMKT: SPY) has a yield of just about 1.3%. You need to understand how the high dividend ETF achieves a yield that's three times as high as the broader S 500 index before you buy it.
The SPDR Portfolio S 500 High Dividend ETF is a fairly simple exchange-traded fund to understand. It just selects the 80 stocks with the highest dividend yields from the S 500.
The stocks that are selected for the portfolio are then equally weighted, which ensures that each holding has the same impact on performance, for better or worse. That's a really straightforward approach for an ETF.
Source Fool.com