The SPDR Portfolio S&P 500 High Dividend ETF Owns Some High-Risk Dividend Stocks – Is It Still Worth Buying?

The SPDR Portfolio S&P 500 High Dividend ETF is known for its high-yield stocks, offering a dividend yield of around 4.4%. In comparison, the SPDR S&P 500 ETF Trust has a yield of just 1.3%. This ETF selects the 80 stocks with the highest dividend yields from the S&P 500 and equally weights them. However, it’s important to note that companies in the S&P 500 index are not always representative of the broader economy, as business fortunes can change over time.

For example, Altria Group is included in this ETF due to its high dividend yield, but ongoing declines in its cigarette business have affected its stock performance. The ETF also has a large allocation to certain sectors like real estate, financials, and utilities, lacking diversification in other areas. While it may be a good option for some dividend investors, it’s important to understand the risks associated with its selection criteria and sector allocations before investing.