Best SPDR ETFs Of May 2024

Many investors choose total equity market funds to get exposure to the favorable long-term growth prospects of the entire U.S. stock market. The S&P 500  has rewarded investors with an average annualized return of approximately 10% (with dividends reinvested) for roughly the past 100 years.

The SPDR Portfolio S&P 500 ETF Trust is a great option for this mission, as the fund reinvests dividends and employs various derivative strategies to generate additional income. Best of all, SPLG charges a rock-bottom expense ratio of 0.02%.

While the SPDR S&P 500 ETF (SPY) is a more popular choice, it’s worth pointing out that SPLG’s annual cost is less than one-fourth of the SPY’s expense ratio. It’s hard to beat the lower price of SPLG, especially for long-term investors.

Real estate investment trusts  (REITs) 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 at least 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.

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.

Launched in April 2019, the SPDR SSGA US Sector Rotation ETF is the newest SPDR fund on our list. It’s also the only actively managed ETF  we’ve included on our list.

XLSR strives to ferret out the investment sectors poised to outperform the overall market. The fund attempts to match or beat the S&P 500 index. The fund’s top sectors are technology, consumer cyclicals, health care, industrials, financials and communications.

The fund has lagged the S&P 500 over the past 12 months. But if you think that the current market is setting the stage for a shift in the sectors that investors favor, XLSR could be a way to play that rotation. Meanwhile, XLSR showed less volatility than its peer group on average over the past five years.

Technological innovations continue to transform the way the economy functions. Artificial intelligence, robotics, automation, ever more sophisticated means of communication and greater computer processing power—all are disruptive innovations that create opportunities.

The SPDR S&P Kensho New Economies Composite ETF attempts to capture the returns of companies across market sectors  that are involved in developing and implementing new economic advances in those areas. This thematic fund tracks the S&P Kensho New Economies Composite Index, a global benchmark founded in 2018.

Many of KOMP’s top holdings are familiar, such as Facebook parent Meta Platforms (META) and Microsoft (MSFT). Other holdings are not exactly household names, such as defense electronics maker Elbit Systems (ESLT), information technology firm Leidos Holdings (LDOS) and autonomous aerial vehicle maker EHang Holdings (EH).

KOMP’s growth potential, spiced by OK dividend yield, make this ETF a great choice for long-term investors who are comfortable with more investment volatility.

More and more investors have chosen investments that align with their values. State Street Global Advisors addresses this demand with a lineup of sustainable investing ETFs, including broad-based funds and more focused options.

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.

SPYX owns about 490 stocks. Its top holdings are familiar mega-caps including Apple, Microsoft, Amazon.com, Alphabet, Tesla and Berkshire Hathaway.

Bonds can be a challenging asset class in the best of times. They might be even trickier to grasp under current circumstances. Remember, as interest rates increase, bond prices fall. And as old bonds mature, funds tend to replace them with higher-yielding issues, boosting your overall returns.

The SPDR Portfolio Short Term Treasury ETF emulates the Bloomberg 1-3 Year U.S. Treasury Index, which tracks the performance of short-duration U.S. treasury bills and notes. SPTS owns roughly 100 securities maturing in one to three years. Investors seeking a core holding for the fixed income portion of their portfolio might consider this fund.

The 12-month yield of SPTS may look puny in comparison to a typical high yield bond ETF’s. But SPTS’s dividend yield is more than double the yield of the broad stock market in the form of the S&P 500 Index. Also, SPTS’s focus is on short-term Treasury bonds. Investors saw those as a relative safe haven amid rising rates. Now, with the Fed signaling uncertainty about when it will throttle back on rates, shorter-term yields have stayed elevated.

Bottom line: SPTS remains worth considering as a vehicle for reducing your portfolio’s volatility.

An investment portfolio would be incomplete without exposure to international stocks. The SPDR Portfolio Developed World Ex-U.S. ETF charges an ultra-low-cost expense ratio and a respectable dividend yield. The fund owns roughly 2,300 stocks, weighted by market capitalization.

SPDW tracks the S&P Developed Ex-U.S. BMI Index and provides exposure to 24 international markets. The broad diversification curtails country-specific risk. With exposure to large-, mid-, and small-capitalization firms, international investors will gain broad exposure—albeit without the 10% typically allocated to emerging markets—to a wide swath of the top international companies.