5 Best Index Funds to Diversify Your Portfolio

4. SPDR S&P 500 Trust ETF (NYSEARCA:SPY)

Yield (TTM): 1.48%

The SPDR S&P 500 ETF (NYSEARCA:SPY) invests in growth and value stocks of large-cap companies and tracks the performance of the S&P 500 Index. The fund employs a full replication technique. The fund has an expense ratio of 0.09% and a trailing twelve-month yield of 1.48%. The fund has a top 10 holdings concentration of 28.25% and its investments are spread across the healthcare, consumer cyclical, utilities, and consumer defensive segments.

One of the top holdings of the SPDR S&P 500 ETF (NYSEARCA:SPY) is Johnson & Johnson (NYSE:JNJ). On July 20, Citi analyst Joanne Wuensch revised her price target on Johnson & Johnson (NYSE:JNJ) to $201 from $205 and reiterated a ‘Buy’ rating on the shares.

As of June 30, GQG Partners owns over 6.56 million shares of Johnson & Johnson (NYSE:JNJ) and is the leading shareholder in the company. The fund’s stake is valued at $1.16 billion and the investment covers 2.86% of Rajiv Jain’s 13F portfolio.

Mayar Capital named a few stocks in its second-quarter 2022 investor letter, one of which was Johnson & Johnson (NYSE:JNJ). Here is what the firm had to say:

“J&J is currently our largest position and a long-standing holding. The majority of the group’s sales comes from its collection of pharmaceutical franchises, but a large majority (~45%) comes from its collection of medical device businesses and its consumer brands.

Here’s how JNJ make and spend a dollar of revenues: As of 2021, about 55 cents of that dollar comes from its pharmaceutical sales – sales of drugs to pharmacies and distributors – while 30 cents come from the sale of medical devices, such as surgery equipment and orthopaedics. The rest of that dollar in sales comes from sales of JNJ’s consumer brands such as Listerine mouthwash, Nicorette nicotine tablets and Neutrogena cosmetics.

To make that dollar, however, JNJ typically spends about 25 cents to make the products themselves and another 27 cents on marketing and general administrative functions. This leaves JNJ with about 48 cents on the dollar in profit…” (Click here to see the full text)