loader image

Home Unique ETFs that divide the S&P 500 into 11 sectors

We have not “sold” Personal Information for purposes of the CCPA. The CCPA definition of “sale” does not include, for example, the transfer of Personal Information as an asset that is part of a merger, bankruptcy, or other disposition of all or any portion of our business. Third party service providers who provide services such as website hosting, data analysis, information technology and related infrastructure provision, customer service, email delivery, auditing and other services. Index ETFs are exchange-traded funds that seek to track a benchmark index like the S&P 500 as closely as possible. Sector ETFs are a powerful tool for investors, offering a straightforward way to incorporate simple or sophisticated sector strategies with precision and transparency.

best spdr etf

KBE yields just 2.11% so there is plenty of room for dividend growth with this SPDR ETF. SDY holds 112 stocks and allocates over a third of its combined weight to the industrial and financial services sectors. The data or material on this Web site is not an offer to provide, or a solicitation of any offer to buy or sell products or services in the United States of America. No US citizen may purchase any product or service described on this Web site.

Geographically, the top three countries represented are Japan (14.3%), the U.K. If you’re interested in a diversified portfolio of stocks with a value tilt, VLU is it. Value stocks started to make a comeback late in 2021 after years in the wilderness. XLF’s performance wasn’t quite as good as XLE in 2021, but shareholders still did well, with the fund ending the year up 34.8%.

MULN Stock Alert: Mullen Confirms Reverse Stock Split Vote

Net long-term capital gains, if any, will be distributed to shareholders as capital gains distributions at least annually. We will also ask you to provide information about your relationship with SS&C ALPS. To personalize your experience on the Services by presenting products and offers tailored to you, and to facilitate social sharing functionality. TOOLS Sector Tracker Track the movement of the 11 Sector SPDRs as well as the 500 component stocks to see how they match up against the S&P 500. Instantly view which SPDRs are leading or lagging the broader market.

best spdr etf

SPDR ETFs boast extremely high liquidity and extremely low tracking error. Even long-term investors continue to pay usually-higher fees for SPDR funds due to their solid track record. Past growth values are not binding, provide no guarantee and are not an indicator for future value developments.

SPDR S&P International Dividend ETF (DWX)

It’s hard to beat the lower price of SPLG, especially for long-term investors. Most ETFs are similar to index-tracking mutual funds, with several key advantages. ETFs can be bought and sold throughout the trading day, unlike mutual funds, which price once daily at market close. The top 10 holdings account for about 52.99% of total assets under management. While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund’s holdings is a valuable exercise.

best spdr etf

With interest rates rising and inflation at 40-year highs, our selection includes ETFs that can help you navigate challenging waters. To be sure, ETFs aren’t on track to overtake mutual funds soon. ETFs had $6.5 trillion in assets at the end of 2022, versus $16.3 trillion for mutual funds. The accelerator oscillator indicator SPDR ETF, best known by its ticker symbol SPY, remains the largest ETF, a behemoth with roughly $370 billion in assets. Thirty years ago, the launch of the first exchange-traded fund ushered in a new era of investing. Now, the industry is bringing exotic trading strategies to the masses.

Looking to Invest Outside the United States?

However, where the ETF gets its revenge on its energy stablemate is over the long haul. The Financial Select Sector SPDR ETF has a five-year annualized return of 13.1%, considerably higher than XLE’s annual return of 2.7% over the past five years, through Jan. 31, 2022. This could help investors decide where to put their money as we navigate a year that many analysts believe won’t be nearly as rewarding as 2021 was. Recent stocks from this report have soared up to +178.7% in 3 months – this month’s picks could be even better.

You can trade ETFs any time the market is open and can access funds on a standard settlement schedule. Almost all exchange-traded funds aim to duplicate the performance of a given market index by purchasing a basket of securities oanda forex broker review tracked by a benchmark index. Investors are then able to buy shares of the fund and trade them like they would any stock. For investors who prefer the Vanguard family of funds, this ETF matches the bargain price of IVV.

  • For instance, it’s less common to be able to buy ETFs in workplace plans, though this is changing some.
  • Both passively managed and active ETFs exist—but S&P 500 ETFs are passively managed by definition.
  • Select Sector SPDR shareholders are subject to risks similar to those of holders of other sector stock portfolios.
  • By looking back at the performance history of older funds, you can have more confidence about how a fund might perform in future cycles.
  • XBI’s weighting methodology leads to vastly different returns relative to its cap-weighted rivals.

The very first ETF launched in the U.S. was an S&P 500 fund, the SPDR’s SPY, which remains the biggest ETF in the world by AUM. An S&P 500 ETF is simply a fund that aims to duplicate the performance of the S&P 500 Index, or one of its various sub-indexes (like the S&P 500 Growth Index tracked by IVW). A long-running debate in asset allocation circles is how much of a portfolio an investor should… This SPDR ETF is up nearly 20% year-to-date and some market observers see more upside coming for biotechnology stocks and ETFs. Luckily, all the above SPDR ETFs should be available at any major broker. The broker has zero trade commissions and zero account fees, and offers fractional shares, dynamic rebalancing, intuitive pie visualization, and a sleek, user-friendly interface and mobile app.

Its average daily trading volume is a fraction of the SPY’s, but it remains respectable and perfectly liquid for regular buy-and-hold investors. As the top benchmark for U.S. stock market performance, the S&P 500 has spawned numerous exchange-traded funds designed to duplicate its performance. XBI’s weighting methodology leads to vastly different returns relative to its cap-weighted rivals. While the tilt to smaller stocks makes this SPDR ETF more volatile than cap-weighted biotech funds, XBI has outperformed the Nasdaq Biotechnology Index by a margin of better than 2-to-1 over the past three years. This SPDR ETF’s 119 holdings have a weighted average market value of $10.3 billion, indicating this is primarily a mid-cap fund.

KBE is up nearly 16% year-to-date, an impressive resurgence after bank stocks languished in 2018. More good news for this SPDR ETF and rival bank funds emerged on June 28 following the completion of the Federal Reserve’s Comprehensive Capital Analysis and Review, or CCAR. That is one of the longest such requirements among all dividend funds. A diversified portfolio can add growth potential for your long-term investments. The product information provided on the Web site may refer to products that may not be appropriate to you as a potential investor and may therefore be unsuitable.

Industry is bringing more exotic trading strategies to the masses

SPDRs also have the flexibility to give a depth of market exposure through one of the ETFs that tracks a broader index. Or an investor can make a concentrated bet by investing in one of the SPDRs that specializes in a sector or specific market capitalization. SPDRs also have the flexibility to be used as hedging instruments. The industry is quickly expanding to include active management and more exotic investing products like leveraged and inverse funds. Proponents say the suite of cheap investing options has helped democratize investing. Others, noting the fast growth of risky ETFs that use leverage to amplify both returns and losses, are sounding the alarm about the potential fallout for inexperienced investors.

It seeks to provide investors with exposure to innovation trends such as alternative finance, smart borders, cyber security, and many more. Investors tend to value, no pun intended, growth stocks using the net present value model where estimated future earnings are discounted back to the present. To make this calculation, a discount rate such as a 10-year Treasury bill yield is used to accomplish this task. Stubborn inflation, rising interest rates and COVID-19 are three issues that present fortfs review investors with challenges in 2022, while Russia’s invasion of Ukraine only adds more uncertainty to the mix. State Street’s job as an investment manager is to get you from point A to point B with as little pain as possible, and hopefully, plenty of assets in your retirement portfolio. To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.

SPDR Portfolio Emerging Markets ETF (SPEM)

The SPDR S&P 500 Fossil Fuel Reserves Free ETF strives to provide returns commensurate with the S&P 500 Fossil Fuel Free Index, which tracks S&P 500 component stocks except for companies that own fossil fuel reserves. The fund is a suitable replacement for an S&P 500 index fund in a sustainable investment portfolio. The SPDR Dow Jones REIT ETF seeks to provide returns that correspond to the total returns of the Dow Jones U.S. Select REIT index. The index excludes securities whose value deviates from the underlying valuation of the real property in their portfolios. The fund currently includes exposure to the industrial and office, residential, retail, health care and self-storage sectors. Since SPDR ETFs trade like stocks, shares can also be sold short.

The decent yield and growth potential make this ETF a great choice for long-term investors who are comfortable with more investment volatility. Real estate investment trusts are a great way to get exposure to the real estate market and earn dependable cash flows. These special publicly-traded trusts must pay out 90% of their taxable income to shareholders. Rising inflation and interest rates allow property owners to raise rents and generate more income, making REITs a solid choice today. While the SPDR S&P 500 ETF is a more popular choice, it’s worth pointing out that SPLG’s annual cost is one-third of the SPY’s expense ratio of 0.09%.

What’s the difference between the S&P 500 and the DJIA?

Many ETFs also have options tied to their respective performance, which can be used to hedge. When an investor has a long position in the S&P 500 SPDR ETF or to the stock market in general, for example, that investor will make money if the S&P 500 Index goes up. If the index goes down, the investor will begin to lose money on their investments.

A simple, equally-weighted average return of all Zacks Rank stocks is calculated to determine the monthly return. The monthly returns are then compounded to arrive at the annual return. Only Zacks Rank stocks included in Zacks hypothetical portfolios at the beginning of each month are included in the return calculations. Zacks Ranks stocks can, and often do, change throughout the month. Certain Zacks Rank stocks for which no month-end price was available, pricing information was not collected, or for certain other reasons have been excluded from these return calculations.

The ETF is also diversified with the top 10 holdings accounting for just 12% of its $1.8 billion in total assets. It is one of the most densely populated SPDR ETFs featured here, with 1,343 holdings. Estimates are for the fund’s holdings to are expected to grow earnings by almost 15% annually over the next three to five years. Geographically, by weight, the top three countries represented in GWX are Japan (34.2%), South Korea (13.1%) and Canada (9.7%).

If you provide your e-mail address, you may receive e-mail from us. Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate.

This is one reason that day traders and institutional investors prefer ETFs. When choosing an S&P 500 ETF, make sure their dividend yield is at least aligned with the best funds on this list, if not higher. That said, the share prices of S&P 500 ETFs vary widely, so new investors may want to ensure that the prices of their ETFs of choice aligns with how they plan to invest. This especially if you pursue dollar cost averaging as not all brokerages currently allow clients to buy fractional shares of ETFs. Older funds have been through more economic cycles and have been stress tested by wider varieties of market conditions.