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SPYD: High-Yield Might Have More Risk Than Benefit

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SPDR® Portfolio S&P 500® High Dividend ETF offers dividend growth with lower volatility. Find out why SPYD is a solid hold amid economic slowdown risks.
The article on Seeking Alpha discusses the SPDR Portfolio S&P 500 High Dividend ETF (SPYD), which focuses on providing high dividend yields from S&P 500 companies. It highlights that while SPYD offers an attractive yield, it might come with increased risk due to its concentration in sectors like financials, real estate, utilities, and materials, which are often more sensitive to economic downturns. The ETF's methodology selects companies based on their trailing 12-month dividend yield, potentially leading to a portfolio overweight in sectors that might not perform well in all market conditions. The article suggests that while the high yield could be appealing for income-focused investors, the concentration risk and the cyclical nature of the sectors it heavily invests in could mean higher volatility and potential underperformance compared to broader market indices during economic stress. It advises investors to consider these factors alongside their income needs and risk tolerance.

Read the Full Seeking Alpha Article at:
[ https://seekingalpha.com/article/4741506-spyd-high-yield-might-have-more-risk-than-benefit ]