Securing a good yield without taking on much risk is sometimes easier said than done. But through an exchange-traded fund (ETF), investors can get a good balance. The SPDR Portfolio S&P 500 High Dividend ETF (NYSEArca:SPYD) is a great example of that.
Its 4.7% yield is well above the S&P 500 average which is around just 1.4%. And with a broad mix of stocks in the fund, investors don’t need to worry about the safety of one individual stock’s performance or how strong its payouts are.
There is no stock in the ETF that even makes up more than 2% of the total weight. The largest holding is Seagate Technology (NASDAQ:STX), which accounts for just 1.7%. The fund is well-diversified with 25% of its holdings coming from financial services, 19% from real estate stocks, 14% from energy, and over 13% from utilities.
What’s great is that in addition to paying a high yield, the fund has also been outperforming the S&P 500, posting gains of 43% over the past year while the broader index has risen by just 35%.
If you’re looking for a safe place to store your money, the ETF could be a great option as it can not only diversify your portfolio but also give you a great yield.
And with a net expense ratio of just 0.07%, the costs are miniscule. The average stock in this ETF trades at just 21 times its earnings and 1.7 times book value, making it an attractive option for value investors as well.