What SPYD actually is

SPYD is a State Street SPDR fund built around an index of 80 high dividend-yielding companies within the S&P 500. It invests substantially all, and at least 80%, of its assets in the securities of the index. Unlike VYM, it can include REITs, because they are part of the S&P 500.

It launched in 2015.

What is inside

Choosing the 80 highest yielders means the fund holds a lot of real estate, utilities, financials and energy, and little technology. Some of these companies yield a lot because their share prices have fallen, so the list changes over time.

The result is much more concentrated in specific sectors than a broad S&P 500 fund.

Distributions

SPYD pays out the dividends of its holdings regularly, and its yield is typically among the highest of the large dividend ETFs. Check the fund’s current yield, fees and distribution schedule on the issuer’s website, because they change.

What to keep in mind

  • Yield traps. A high yield can signal trouble, so a screen based only on yield can include risky companies.
  • Sector concentration. It is heavy in a few sectors.
  • Rate sensitivity. Real estate and utilities react to interest rates.
  • Turnover. The holdings change as yields change.

Quick take

SPYD is built for income, with the trade-offs that high yields bring. Read our guide on yield traps before relying on any high-yield fund.