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Is Franklin U.S. Low Volatility High Dividend Index ETF (LVHD) a Strong ETF Right Now?
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Launched on 12/28/2015, the Franklin U.S. Low Volatility High Dividend Index ETF (LVHD - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
Because the fund has amassed over $854.19 million, this makes it one of the average sized ETFs in the Style Box - Large Cap Value. LVHD is managed by Franklin Templeton Investments. Before fees and expenses, LVHD seeks to match the performance of the QS Low Volatility High Dividend Index.
The QS Low Volatility High Dividend Index provides stable income through investment in stocks of profitable U.S. companies with relatively high dividend yields, lower price and earnings volatility.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.27%.
The fund has a 12-month trailing dividend yield of 3.61%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
Representing 21.40% of the portfolio, the fund has heaviest allocation to the Consumer Staples sector; Utilities and Real Estate round out the top three.
When you look at individual holdings, Verizon Communications In (VZ - Free Report) accounts for about 2.93% of the fund's total assets, followed by Us Bancorp (USB - Free Report) and Southern Co/the (SO - Free Report) .
LVHD's top 10 holdings account for about 26.14% of its total assets under management.
Performance and Risk
Year-to-date, the Franklin U.S. Low Volatility High Dividend Index ETF has lost about -1.65% so far, and is down about -2.58% over the last 12 months (as of 01/23/2024). LVHD has traded between $32.68 and $39.01 in this past 52-week period.
The fund has a beta of 0.79 and standard deviation of 13.63% for the trailing three-year period. With about 128 holdings, it effectively diversifies company-specific risk.
Alternatives
Franklin U.S. Low Volatility High Dividend Index ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
Schwab U.S. Dividend Equity ETF (SCHD - Free Report) tracks Dow Jones U.S. Dividend 100 Index and the Vanguard Value ETF (VTV - Free Report) tracks CRSP U.S. Large Cap Value Index. Schwab U.S. Dividend Equity ETF has $52.57 billion in assets, Vanguard Value ETF has $106.22 billion. SCHD has an expense ratio of 0.06% and VTV charges 0.04%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Value.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Is Franklin U.S. Low Volatility High Dividend Index ETF (LVHD) a Strong ETF Right Now?
Launched on 12/28/2015, the Franklin U.S. Low Volatility High Dividend Index ETF (LVHD - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
Because the fund has amassed over $854.19 million, this makes it one of the average sized ETFs in the Style Box - Large Cap Value. LVHD is managed by Franklin Templeton Investments. Before fees and expenses, LVHD seeks to match the performance of the QS Low Volatility High Dividend Index.
The QS Low Volatility High Dividend Index provides stable income through investment in stocks of profitable U.S. companies with relatively high dividend yields, lower price and earnings volatility.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.27%.
The fund has a 12-month trailing dividend yield of 3.61%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
Representing 21.40% of the portfolio, the fund has heaviest allocation to the Consumer Staples sector; Utilities and Real Estate round out the top three.
When you look at individual holdings, Verizon Communications In (VZ - Free Report) accounts for about 2.93% of the fund's total assets, followed by Us Bancorp (USB - Free Report) and Southern Co/the (SO - Free Report) .
LVHD's top 10 holdings account for about 26.14% of its total assets under management.
Performance and Risk
Year-to-date, the Franklin U.S. Low Volatility High Dividend Index ETF has lost about -1.65% so far, and is down about -2.58% over the last 12 months (as of 01/23/2024). LVHD has traded between $32.68 and $39.01 in this past 52-week period.
The fund has a beta of 0.79 and standard deviation of 13.63% for the trailing three-year period. With about 128 holdings, it effectively diversifies company-specific risk.
Alternatives
Franklin U.S. Low Volatility High Dividend Index ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
Schwab U.S. Dividend Equity ETF (SCHD - Free Report) tracks Dow Jones U.S. Dividend 100 Index and the Vanguard Value ETF (VTV - Free Report) tracks CRSP U.S. Large Cap Value Index. Schwab U.S. Dividend Equity ETF has $52.57 billion in assets, Vanguard Value ETF has $106.22 billion. SCHD has an expense ratio of 0.06% and VTV charges 0.04%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Value.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.