SPDR S&P Dividend ETF (SDY): Complete Beginner's Guide
SPDR S&P Dividend ETF (SDY) is a high dividend yield ETF from State Street Global Advisors with an expense ratio of 0.35% and $22.0B in assets under management. Our Beginner Suitability Score: 9/10 (Great for Beginners). 5-year annualized return: 8.80%.
Last updated: April 2026
State Street Global Advisors • High Dividend Yield
Expense Ratio
0.35%
AUM
$22.0B
Dividend Yield
2.70%
Inception
2005
Beginner Score
9/10
What is SPDR S&P Dividend ETF?
SDY tracks companies from the S&P Composite 1500 that have increased dividends for at least 20 consecutive years, weighted by their indicated annual dividend yield. This unique approach tilts the portfolio toward the highest-yielding long-term dividend growers. Beginners who want higher current income from a proven group of dividend-raising companies will find SDY delivers both yield and reliability.
SDY is managed by State Street Global Advisors and has been available since 2005. With $22.0B in assets under management, it's a well-established fund with strong institutional backing. The fund charges an expense ratio of 0.35%, which means for every $10,000 you invest, you pay approximately $35 per year in management fees.
SDY at a Glance — Key Metrics
| Expense Ratio | 0.35% |
| Total Holdings | 130 |
| P/E Ratio | 18.8 |
| Beta | 0.82 |
| Dividend Yield | 2.70% |
| AUM | $22.0B |
| Inception Year | 2005 |
| Issuer | State Street Global Advisors |
Top 10 Holdings in SDY
SDY holds 130 different securities. Here are the largest positions that make up the core of this fund:
| # | Company | Ticker | Weight |
|---|---|---|---|
| 1 | Realty Income Corp. | O | 2.50% |
| 2 | National Retail Properties | NNN | 2.20% |
| 3 | Kenvue Inc. | KVUE | 2.00% |
| 4 | International Business Machines | IBM | 1.90% |
| 5 | Chevron Corp. | CVX | 1.80% |
| 6 | AbbVie Inc. | ABBV | 1.70% |
| 7 | Southern Co. | SO | 1.60% |
| 8 | Consolidated Edison | ED | 1.50% |
| 9 | AT&T Inc. | T | 1.50% |
| 10 | ExxonMobil Corp. | XOM | 1.40% |
SDY's top holding is Realty Income Corp. (O) at 2.50%, followed by National Retail Properties (NNN) at 2.20% and Kenvue Inc. (KVUE) at 2.00%. The top 10 holdings account for 18.10% of the fund's 130 total positions.
View data table
| Rank | Company | Ticker | Weight |
|---|---|---|---|
| 1 | Realty Income Corp. | O | 2.50% |
| 2 | National Retail Properties | NNN | 2.20% |
| 3 | Kenvue Inc. | KVUE | 2.00% |
| 4 | International Business Machines | IBM | 1.90% |
| 5 | Chevron Corp. | CVX | 1.80% |
| 6 | AbbVie Inc. | ABBV | 1.70% |
| 7 | Southern Co. | SO | 1.60% |
| 8 | Consolidated Edison | ED | 1.50% |
| 9 | AT&T Inc. | T | 1.50% |
| 10 | ExxonMobil Corp. | XOM | 1.40% |
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SDY Performance History
Here's how SDY has performed over different time periods. Remember that past performance doesn't guarantee future results, but it gives you a sense of the fund's track record:
YTD
1.80%
1 Year
15.50%
3 Year
7.00%
5 Year
8.80%
10 Year
9.50%
SDY has returned 8.80% annualized over 5 years and 9.50% over 10 years. YTD return is 1.80%.
View data table
| Period | Return |
|---|---|
| YTD | 1.80% |
| 1 Year | 15.50% |
| 3 Year | 7.00% |
| 5 Year | 8.80% |
| 10 Year | 9.50% |
Beginner Suitability Score: 9/10
Our proprietary Beginner Suitability Score evaluates ETFs based on five factors that matter most to new investors: fees, volatility, diversification, dividend history, and track record length.
SDY scores 9/10 because it has very low fees, shows lower-than-average volatility, offers broad diversification across 130 holdings, and has been available since 2005, giving it a proven track record.
How to Buy SDY — Step by Step
- Open a brokerage account — We recommend Fidelity, Charles Schwab, or Vanguard for ETF investing. All offer $0 commissions on ETF trades.
- Fund your account — Transfer money from your bank. You can start with as little as $1 if your broker offers fractional shares.
- Search for "SDY" — Use the search bar in your brokerage platform to find SPDR S&P Dividend ETF.
- Place your order — Choose "Market Order" for simplicity or "Limit Order" if you want to set a specific price. Enter how many shares (or dollar amount) you want to buy.
- Set up automatic investing — Most brokers let you schedule recurring purchases (e.g., $100/month on the 1st). This is dollar cost averaging in action.
SDY Sector Allocation
Here's how SDY distributes its investments across different sectors of the economy:
SDY's largest sector allocation is Utilities at 16.5%, followed by Financials at 15.5% and Consumer Staples at 14.5%.
View data table
| Sector | Weight |
|---|---|
| Utilities | 16.5% |
| Financials | 15.5% |
| Consumer Staples | 14.5% |
| Industrials | 13.5% |
| Real Estate | 9.5% |
| Health Care | 8.5% |
| Materials | 7.5% |
| Energy | 6.5% |
| Information Technology | 4.0% |
| Consumer Discretionary | 3.0% |
| Communication Services | 1.0% |
Dollar Cost Averaging Into SDY
Here's what consistent monthly investing could look like over time, assuming an average annual return of 8% (approximate historical stock market average):
| Monthly | 10 Years | 20 Years | 30 Years |
|---|---|---|---|
| $100/mo | $18,417 | $59,295 | $150,030 |
| $250/mo | $46,041 | $148,237 | $375,074 |
| $500/mo | $92,083 | $296,474 | $750,148 |
*Projections assume 8% average annual return with monthly compounding. Actual returns will vary. Past performance doesn't guarantee future results.
Fee impact: With SDY's expense ratio of 0.35%, a $10,000 investment would lose approximately $2,930 to fees over 20 years compared to a zero-fee investment. This is significant — consider whether the fund's strategy justifies these costs.
SDY's expense ratio of 0.35% costs $2,930 on a $10,000 investment over 20 years (assuming 8% annual return). Without fees, the investment would grow to $46,610 instead of $43,680.
View data table
| Year | Without Fees | With Fees | Fee Cost |
|---|---|---|---|
| 0 | $10,000 | $10,000 | $0 |
| 5 | $14,693 | $14,457 | $236 |
| 10 | $21,589 | $20,900 | $689 |
| 15 | $31,722 | $30,214 | $1,508 |
| 20 | $46,610 | $43,680 | $2,930 |
Pros and Cons of SDY
Pros
- ✓Yield-weighted approach provides higher income than market-cap-weighted dividend ETFs
- ✓20-year dividend growth requirement ensures a long track record of reliability
- ✓Includes small and mid-cap dividend growers that aristocrats-only funds may miss
- ✓Nearly two decades of live track record since 2005 inception
Cons
- ✗Higher expense ratio of 0.35% eats into the yield advantage over cheaper funds
- ✗Yield weighting can overweight slower-growing companies with high payout ratios
- ✗Heavier concentration in defensive sectors may lag during growth-driven markets
SDY vs Similar ETFs
See how SDY stacks up against similar funds:
Frequently Asked Questions
Is SDY a good ETF for beginners?▾
SDY has a Beginner Suitability Score of 9/10 on our scale. This makes it a strong choice for new investors due to its low fees and broad diversification.
What is the expense ratio of SDY?▾
SDY has an expense ratio of 0.35%. This means for every $10,000 you invest, you pay approximately $35 per year in fees. This is considered very low and cost-efficient.
How much money do I need to invest in SDY?▾
You can invest in SDY with as little as $1 through brokers that offer fractional shares (like Fidelity, Schwab, or Robinhood). There is no minimum investment required beyond the share price itself, which changes daily. Dollar cost averaging — investing a fixed amount regularly — is a popular strategy.
Does SDY pay dividends?▾
Yes, SDY pays dividends with a current yield of approximately 2.70%. Dividends are typically paid quarterly and can be reinvested automatically through most brokers.
What are the top holdings in SDY?▾
The top holdings in SDY include Realty Income Corp. (2.50%), National Retail Properties (2.20%), Kenvue Inc. (2.00%), and more. The fund holds 130 total positions, providing broad diversification across many companies.
What sectors does SDY invest in?▾
SDY's largest sector allocations are Utilities (16.50%), Financials (15.50%), Consumer Staples (14.50%). This sector distribution shows a focus on utilities stocks.
How much do SDY's fees cost over time?▾
With an expense ratio of 0.35%, a $10,000 investment in SDY would lose approximately $2,930 to fees over 20 years (assuming 8% annual returns). Consider whether the fund's strategy justifies these costs.