Customizing SPY

March 8, 2013

Year to Date Performance of  “Customized ” SPY ETFs

SPY     +8.8%

RSP   +10.2%

SDY   +10.8%


RSP is SPY  converted from investment  allocation based market capital weighting to equal weighting.   To illustrate, compare the top allocation, number 10 and number 25 in each portfolio..

In SPY the top allocation is Exxon which represents 2.96% of the value of the total 500 equity portfolio.  Number 10 is Pfizer which accounts for 1.5% of the total portfolio. and, at number 25, Qualcomm which represents 0.82% of the entire 500 portfolio.  On the other hand ( equal weighting ), Netflix represents 0.35% of the RSP portfolio, followed at number 10 by Genworth Financial – 0.25% and Pitney Bowes at number 25 representing o.23% of the portfolio’s value.  Exxon, Pfizer and Qualcomm are still in the portfolio with each representing about .023% of the total portfolio.  The net impact of the change to equal weighting is a tilt toward Mid Cap and Value performance ….with a bit more volatility.

SDY – This ETF holds the 60 highest yielding names in SPY that have increased dividends every year for the past 25 years.  The yield is presently 3.2% versus 2.04% for SPY.  Number 1 in allocation is Pitney Bowes at 2.91% of portfolio’s value ( yielding 10.69% ! ) , followed at number 10 by Johnson and Johnson ( 1.80% of portfolio ),  yielding 3.14%, followed by Eaton Vance Corporation at number 25 representing  1.43% of the portfolio with a yield of 1.98%.

An equally blended portfolio of SPY, RSP and SDY would have appreciated 9.93% since January 1, 2013 versus 8.8% for SPY alone.

I hold all three with SPY and cousins ( VOO , IVV and VTI ) accounting for 50% of value.

All buying and selling decisions for the mix are driven by SPY alone.

Richard Maurice Gore

One Response to “Customizing SPY”

  1. Abalfspaply Says:

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