AAM S&P 500 High Dividend Value ETF (SPDV)
ARCA ARCA Primary Summary
SPDV Chart
Dividend Safety Check: SPDV and the High-Dividend Value Approach
The AAM S&P 500 High Dividend Value ETF (NYSEARCA:SPDV) screens the S&P 500 for stocks combining the highest yields with the strongest value characteristics, then caps sector exposure to prevent concentration in utilities and REITs.
Retirees and Income Investors Get Paid Monthly, Plus 20% Gains With This ETF
The AAM S&P 500 High Dividend Value ETF (NYSEARCA:SPDV) generates income by holding dividend-paying stocks.
SPDV: Are Improved Fundamentals And A Higher Expected Yield Good Enough?
SPDV is comprised of 5 stocks from each of the 11 GICS sectors, with selections based on dividend yield and free cash flow yield. I estimate a 3.88% forward yield. Total returns since its inception were poor, with my previous review revealing low growth and low quality. However, those metrics have improved, resulting in an upgraded "hold" rating. Even so, SPDV has quality deficiencies compared to the 3.86%-yielding SCHD, and its dividend growth features are poor and inconsistent due to its reconstitution process.
AAM S&P 500 High Dividend Value ETF Investors
| Name | Quantity | Cost | Value | Profit ($) | Gain (%) |
|---|---|---|---|---|---|
| KMT Kirk M. Tokheim Ameritas Advisory Services LLC | 29,662 | $884,383.97 | $1.16M | $278,959.67 | 31.54% |
| RAF Richard A. Flora Key Client Fiduciary Advisors LLC | 16,773 | $523,004.48 | $658,004.79 | $135,000.31 | 25.81% |
AAM S&P 500 High Dividend Value ETF (SPDV) FAQ
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AAM S&P 500 High Dividend Value ETF Profile
| ARCA Exchange | US Country |
Overview
The index operates with a specific focus on the S&P 500® Index constituents, aimed at investors seeking exposure to high dividend yields and sustainable payout ratios. This rules-based, equal-weighted index ensures that its composition adheres strictly to predefined criteria, prioritizing companies that not only offer high dividend yields but also demonstrate the capability to maintain these dividends. This approach ensures that while investors are provided with potentially higher income streams, they do not overly concentrate their exposure in any single sector but maintain a diversified investment profile. The index's strategy, which mandates that at least 80% of the fund’s net assets, in addition to borrowings for investment purposes, be invested in securities within the S&P 500 that have shown a positive indicated annual dividend yield in the preceding year, underscores a commitment to investing in established, dividend-paying companies.
Products and Services
- Rules-Based, Equal-Weighted Index Investment
Investors are offered a product that adheres strictly to predetermined rules, focusing on selecting stocks within the S&P 500 Index that fulfill specific high dividend yield and sustainability criteria. This method ensures an equal-weighted approach, avoiding overweight in any given sector and promoting a more balanced and diversified portfolio.
- High Dividend Yield and Sustainability Focus
The product targets securities demonstrating not just high dividend yields but also the ability to consistently pay these dividends. It is particularly suited for income-seeking investors who also value the stability and growth prospects of their investments. This focus ensures that while the objective is to maximize income through dividends, the underlying sustainability of these dividends is not compromised.
- Investment in S&P 500 Constituents
By limiting the investment universe to the constituents of the S&P 500 Index, the index provides exposure to large-cap U.S. equities. These companies are typically industry leaders with a history of financial stability and growth, adding an element of security to the investment. The criterion that they must have shown a positive indicated annual dividend yield within the past year further refines the selection to include only those that are currently rewarding their shareholders with dividend payouts.
- Diversified Sector Exposure
The careful composition of the index ensures that investments are spread across multiple sectors, reducing the risk associated with sector concentration. This diversified sector exposure aids in mitigating sector-specific risks, providing a more stable investment environment for the fund's shareholders.
