SPDR S&P Dividend ETF (SDY): Complete Beginner's Guide
Last updated: March 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% |
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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%
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.
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.
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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.