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Is Legg Mason Low Volatility High Dividend ETF (LVHD) a Strong ETF Right Now?
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Launched on 12/28/2015, the Legg Mason Low Volatility High Dividend 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?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track 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.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
LVHD is managed by Franklin Templeton Investments, and this fund has amassed over $757.03 million, which makes it one of the average sized ETFs in the Style Box - Large Cap Value. LVHD, before fees and expenses, 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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.27%.
It has a 12-month trailing dividend yield of 2.56%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Taking into account individual holdings, Pfizer Inc accounts for about 2.78% of the fund's total assets, followed by Eaton Corp Plc and Kroger Co.
Its top 10 holdings account for approximately 26.41% of LVHD's total assets under management.
Performance and Risk
So far this year, LVHD return is roughly 23.49%, and is up about 23.03% in the last one year (as of 12/15/2021). During this past 52-week period, the fund has traded between $32 and $38.84.
The fund has a beta of 0.80 and standard deviation of 21.62% for the trailing three-year period. With about 86 holdings, it effectively diversifies company-specific risk.
Alternatives
Legg Mason Low Volatility High Dividend 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.
IShares Russell 1000 Value ETF (IWD - Free Report) tracks Russell 1000 Value Index and the Vanguard Value ETF (VTV - Free Report) tracks CRSP U.S. Large Cap Value Index. IShares Russell 1000 Value ETF has $57.82 billion in assets, Vanguard Value ETF has $88.94 billion. IWD has an expense ratio of 0.19% 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 Legg Mason Low Volatility High Dividend ETF (LVHD) a Strong ETF Right Now?
Launched on 12/28/2015, the Legg Mason Low Volatility High Dividend 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?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track 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.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
LVHD is managed by Franklin Templeton Investments, and this fund has amassed over $757.03 million, which makes it one of the average sized ETFs in the Style Box - Large Cap Value. LVHD, before fees and expenses, 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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.27%.
It has a 12-month trailing dividend yield of 2.56%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Taking into account individual holdings, Pfizer Inc accounts for about 2.78% of the fund's total assets, followed by Eaton Corp Plc and Kroger Co.
Its top 10 holdings account for approximately 26.41% of LVHD's total assets under management.
Performance and Risk
So far this year, LVHD return is roughly 23.49%, and is up about 23.03% in the last one year (as of 12/15/2021). During this past 52-week period, the fund has traded between $32 and $38.84.
The fund has a beta of 0.80 and standard deviation of 21.62% for the trailing three-year period. With about 86 holdings, it effectively diversifies company-specific risk.
Alternatives
Legg Mason Low Volatility High Dividend 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.
IShares Russell 1000 Value ETF (IWD - Free Report) tracks Russell 1000 Value Index and the Vanguard Value ETF (VTV - Free Report) tracks CRSP U.S. Large Cap Value Index. IShares Russell 1000 Value ETF has $57.82 billion in assets, Vanguard Value ETF has $88.94 billion. IWD has an expense ratio of 0.19% 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.