Are you trying to decide between SPYD and SPYG for your investment portfolio? Let’s break down their key features, composition, and performance to help you figure out which one might be better for you.
The SPDR (Standard and Poor Depository Receipt) family offers a variety of ETFs designed to give broad exposure to core asset categories. This article focuses on two of these ETFs: SPYD, which is a high dividend ETF, and SPYG, a growth ETF.
SPYD, or the SPDR Portfolio S&P 500 High Dividend ETF, was launched in 2015. It aims to mirror the performance of the S&P 500 High Dividend Index by investing at least 80% of its assets in S&P 500 securities. This index tracks the 80 companies in the S&P 500 that offer the highest dividends. SPYD focuses on large-cap U.S. equities, including common stocks and real estate investment trusts. It has a low expense ratio of 0.07% and aims to provide high dividend income along with asset appreciation. Currently, SPYD manages around $6.515 billion in assets and offers a dividend yield of 3.97%.
On the other hand, SPYG, or the SPDR Portfolio S&P 500 Growth ETF, was launched in 2000. Unlike SPYD, SPYG tracks the S&P 500 Growth Index, which focuses on large-cap U.S. equities with strong growth patterns. Companies are selected based on factors like sales volume, momentum, and earnings-to-price ratios. SPYG manages about $12.65 billion in assets, has an expense ratio of 0.04%, and offers a dividend yield of around 0.74%.
The main difference between SPYD and SPYG is their focus: SPYD aims for high dividends, while SPYG targets growth. This difference is also reflected in their portfolio compositions. SPYD’s top ten holdings make up about 15.38% of its total assets, indicating a diverse portfolio. Its largest sector investments are in financial services, real estate, and energy.
In contrast, SPYG’s top ten holdings account for 43.95% of its total assets, showing a more concentrated portfolio. Most of its investments are in the technology sector, which makes up 37.44% of its portfolio, followed by consumer cyclical and communication services.
When it comes to performance, SPYD has outperformed SPYG in one-year and monthly returns. However, over three and five years, SPYG has done better. Since SPYD’s inception in 2015, SPYG has shown a total return of around 171.19%, compared to SPYD’s 98.58%. Keep in mind that past performance doesn’t guarantee future results.
Both SPYD and SPYG are low-cost options. SPYD’s expense ratio is 0.07%, meaning a $10,000 investment would cost you $7 annually. SPYG’s expense ratio is even lower at 0.04%, costing $4 annually for the same investment amount.
SPYG offers high performance and low costs, making it a good long-term investment option. However, SPYD provides lower market volatility and higher dividend yields. Your choice between these two should depend on your investment strategy and objectives. If you prefer stability and high dividends, SPYD might be the way to go. If you’re looking for growth and can handle more volatility, SPYG could be a better fit.
Ultimately, your investment decision should align with your goals and preferences. Happy investing!