SPYD Dividend Calculator

It takes the 80 highest-yielding companies in the S&P 500 and weights them equally, rebalancing twice a year. That is a genuinely simple rule, and it produces a genuinely high yield — but it is screening on yield alone, with no quality filter. A company whose share price has halved because the market expects bad news will show a high yield and get picked up. Equal weighting also means the smallest holdings get the same allocation as the largest, which concentrates the fund in sectors like real estate and utilities rather than tracking the broad market.

Because SPYD's distribution has gone backwards in some years, and a screen that selects on high yield naturally picks up companies more likely to cut. A dividend-growth fund can reasonably be modelled at 6-8%; doing the same here would be projecting a trend the fund has not demonstrated. The 2% default is deliberately modest, and it is worth running the projection at 0% or negative to see how the income holds up — that scenario is not hypothetical for this kind of fund.

Yes. Set the annual dividend growth slider to a negative number and the payout per share shrinks each year instead of growing. It is a blunt instrument — real cuts arrive suddenly rather than as a smooth decline — but it answers the useful question, which is how much of your projected income depends on the payout at least holding steady. On a high-yield screen that dependency is worth testing before you rely on the headline number.

It depends on your horizon. If you need income now and cannot wait a decade for a growth fund to catch up, a higher starting yield has real value. If you are twenty or thirty years from needing the money, the arithmetic usually favours the lower-yielding, faster-growing fund — and this calculator makes that easy to check by running the same amount through both. The other consideration is that SPYD's sector concentration means it behaves differently from the broad market, sometimes helpfully and sometimes not.

Mostly as qualified dividend income, so the US rates are 0%, 15% or 20% by taxable income plus the 3.8% net investment income tax where applicable. A small portion may be non-qualified depending on the holdings — real estate investment trusts, which a high-yield screen tends to pick up, distribute income that is generally taxed at ordinary rates. The calculator assumes about 95% qualified. The higher yield also means the absolute tax bill is larger than on a low-yield fund, which matters more in a taxable account than people usually allow for.

Both, at different times. Equal weighting means the fund is not dominated by its largest holdings, which avoids the concentration risk of a market-cap-weighted index. It also means the semi-annual rebalance systematically sells what has risen and buys what has fallen, which is contrarian by construction — helpful when the fallers recover, painful when they keep falling. For a projection what matters is that SPYD's price behaviour diverges from the S&P 500 meaningfully, so do not carry an assumption from a broad market fund straight across.