It is, of course, the most prudent of persons who seeks the quiet pleasures of passive income. For this is a most delightful and undemanding pursuit, akin to receiving a call of good news at the most fortuitous hour, with but little effort on one’s part. Whether it be the interest accrued from savings accounts, the cheerful checks from properties leased to others, or the kind monthly annuities promised to those discerning enough to engage them-each source is to be considered with care and forethought.
Among the various avenues to which one might turn, the acquisition of dividends is a most appealing option. It is to be found, with remarkable ease, in a well-chosen exchange-traded fund (ETF)-particularly the esteemed SPDR Portfolio S&P 500 High Dividend ETF (SPYD). An investment most agreeable to the steady collector of income, this ETF boasts of both convenience and promise.
Do Not Undervalue the Quiet Majesty of Dividends
It is not uncommon, dear reader, to hear the more youthful and exuberant claim that dividend-paying stocks are best suited for those of an advanced age, as though such investments were a quaint relic of an earlier time. Yet, to embrace such an opinion would be to overlook the considerable merits that dividend payers bring to the table. For indeed, these humble, yielding stocks have, on many an occasion, outperformed their more flamboyant and seemingly promising growth counterparts. And it is no small matter to consider, as one glances upon the table below:
| Dividend-Paying Status | Average Annual Total Return, 1973-2024 |
|---|---|
| Dividend growers and initiators | 10.24% |
| Dividend payers | 9.20% |
| No change in dividend policy | 6.75% |
| Dividend non-payers | 4.31% |
| Dividend shrinkers and eliminators | (0.89%) |
| Equal-weighted S&P 500 index | 7.65% |
A Most Prudent Companion: The SPDR Portfolio S&P 500 High Dividend ETF
The SPDR Portfolio S&P 500 High Dividend ETF, for those with a taste for steady returns and an eye for future appreciation, follows a rather discerning path. It tracks the S&P 500 High Dividend Index, which endeavors to provide not only reliable income but also the hope, albeit slight, of stock price elevation. The ETF’s holdings consist of the 80 highest-yielding stocks from the S&P 500. One need only examine the following table to gauge its performance:
| Over the past… | Average annual gain |
|---|---|
| 12 months | 6.42% |
| 3 years | 6.52% |
| 5 years | 13.59% |
While it is true that recent years have not witnessed anything spectacular, the past five years have been marked by a steady and respectable performance. And let us not forget that this is, after all, a dividend-focused ETF, with a current yield of 4.5%. This is a most generous yield when compared to the mere 1.2% of the S&P 500’s overall yield. One might be pleased to know that even amidst a downturn or a period of stagnation, this ETF continues to deliver a reliable and pleasing income.
Let us consider, for instance, an investment of $10,000-one could expect a return of $450 annually. But do not be deceived, for such numbers may grow in the future, as healthy dividend payers are wont to increase their payouts over time. One may, in time, find oneself receiving $600, $800, or even $1,500 per annum. This is no trivial matter for those with a mind to secure their future.
Of course, there are fees-though they are most modest. The fund’s expense ratio stands at a mere 0.07% annually, which means that for every $10,000 invested, one need only part with $7 in fees.
What’s in the SPDR High Dividend ETF?
The SPDR Portfolio S&P 500 High Dividend ETF, ever mindful of its investor’s needs, presently boasts the following top 10 holdings, which together comprise a little over 13% of its total value:
| Stock | Percent of ETF |
|---|---|
| CVS Health | 1.39% |
| Kimberly-Clark | 1.37% |
| Edison International | 1.37% |
| Altria Group | 1.36% |
| Duke Energy | 1.35% |
| Dominion Energy | 1.35% |
| FirstEnergy | 1.34% |
| Evergy | 1.34% |
| Archer-Daniels-Midland | 1.33% |
| AbbVie | 1.33% |
This fund, one might say, has leaned toward midsized companies (with a median market cap of $23.5 billion) and companies more inclined to value than growth. The greatest portion, 22%, resides within real estate, followed by 18% within consumer staples. The financials, at 15%, and utilities, at 13%, round out the composition of this most respectable investment.
As part of one’s overarching retirement strategy, it is wise to establish sources of passive income-indeed, multiple streams, that in case one should falter, others may continue to provide support. Thus, one is not left in a state of financial uncertainty, as may be the case with more traditional sources.
In the quiet pursuit of financial security, there is much wisdom to be found in such steady investments. 📈
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2025-08-14 14:27