However, potential investors should be aware that the high dividend ETF’s heavy reliance on real estate investment trusts and utilities may leave the fund vulnerable to a rising rate environment.
SPYD also follows an equally weighted indexing methodology, so its top holdings include AGL Resources (NYSE: GAS) 1.6%, TECO Energy (NYSE: TE) 1.5%, KLA-Tencor Corp. (NasdaqGS: KLAC) 1.5%, Transocean (NYSE: RIG) 1.4% and Sysco Corp (NYSE: SYY) 1.4%. Component holdings are rebalanced semi-annually.
“Equal weighting the holdings helps to reduce single security risk that can come with dividend payers,” according to State Street.
For more information on new fund products, visit our new ETFs category.
Max Chen contributed to this article.