Proprietary Data Insights
Top Large Cap Growth ETF Searches This Month
How To Find And Assess An ETF’s Holdings
On Monday, The Juice compared three dividend ETFs popular in Trackstar, our proprietary sentiment indicator. As promised, in today’s newsletter we show you how to find and assess an ETF’s holdings. Finding the holdings is simple enough. However, assessing them requires a bit more thought.
Using the ETF investors search for most in Trackstar, the SPDR S&P 500 ETF (SPY), we show you how to see the stocks an ETF owns. From there, we discuss how to make sense of an ETF’s portfolio as it relates to your circumstances.
First, do a basic Google search. In this case, Google “SPY ETF holdings.”
One of your first results will be the webpage of the firm that puts out the ETF you want info on. In this case, State Street Global Advisors.
Once on the page for the SPY ETF, you’ll see a menu with links to items such as “overview,” “performance” and “holdings.” To see the ETF’s portfolio, click “holdings.”
On the “holdings” page, you’ll see something like this. A list of the top 10 holdings and a link to view the ETF’s entire portfolio.
Because SPY is a passively-managed ETF that tracks the performance of the S&P 500 Index, the ETFs holdings are pretty much identical to the index’s composition. Still, it’s worth noting that, at the moment, Apple (AAPL) and Microsoft (MSFT) make up just over 14% of the SPY ETF.
So you’re overweight AAPL and MSFT. Not a good or bad thing. Just a thing to consider as you make your investment decision.
Going back to Monday’s dividend ETFs, let’s consider the top holdings of the most searched dividend ETF in Trackstar, the Schwab US Dividend Equity ETF (SCHD). SCHD tracks the Dow Jones U.S. Dividend 100 Index. Here are its top ten holdings.
Now let’s do the same for the actively-managed Amplify YieldShares CWP Dividend & Option Income ETF (DIVO), which doesn’t track an index and not only owns dividend-paying stocks, but writes covered calls on them.
Other than the surface-level differences (passive, index tracker versus actively-managed ETF), let’s look at other ways SCHD and DIVO differ.
First, DIVO only owns 31 stocks, as of May 9, 2023. SCHD owns 100.
Second, there are only two stocks in common in the top 10 – Chevron (CVX) and Merck (MRK).
Third, because DIVO holds covered call options, you see them in its complete list of holdings.
This is part of the beauty of ETF investing.
We can talk about single stocks all day long. But the choices you make along those lines tend to be specific to your situation. Be it your goals, preferences and risk tolerance.
More broadly, digging into an ETF’s portfolio can help make DIY investing easier. Maybe you love the 31 names in DIVO, but don’t like half of the companies that make up SCHD and its underlying index. It might not be the easiest task to buy ample amounts of 31 individual stocks and write covered calls on some of them. This takes considerable time, money and knowledge.
So there’s an ETF for that.
The Bottom Line: There’s basically an ETF for everything. Recent editions of our sister newsletter, The Spill, drive this point home. Like this Spill on single stock ETFs. And the field of ETFs considers to get bigger and more comprehensive. On Monday, The Juice gets into the growing world of thematic ETFs.
Either way, to truly find out what’s right for you, it helps to go beyond the marketing, one-paragraph overviews and performance metrics.
Which stocks does the ETF you’re looking at own and why do they own them? Hopefully, we have given you the tools to help answer these questions. Keep looking for The Juice in your inbox as we expand our discussion on ETF investing.
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