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Should Invesco S&P 500 High Dividend Low Volatility ETF (SPHD) Be on Your Investing Radar?
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If you're interested in broad exposure to the Large Cap Value segment of the US equity market, look no further than the Invesco S&P 500 High Dividend Low Volatility ETF (SPHD - Free Report) , a passively managed exchange traded fund launched on 10/18/2012.
The fund is sponsored by Invesco. It has amassed assets over $3.86 billion, making it one of the average sized ETFs attempting to match the Large Cap Value segment of the US equity market.
Why Large Cap Value
Companies that fall in the large cap category tend to have a market capitalization above $10 billion. They tend to be stable companies with predictable cash flows and are usually less volatile than mid and small cap companies.
Carrying lower than average price-to-earnings and price-to-book ratios, value stocks also have lower than average sales and earnings growth rates. Looking at their long-term performance, value stocks have outperformed growth stocks in almost all markets. They are however likely to underperform growth stocks in strong bull markets.
Costs
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.30%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 3.92%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Real Estate sector--about 18% of the portfolio. Utilities and Consumer Staples round out the top three.
Looking at individual holdings, Altria Group Inc (MO - Free Report) accounts for about 3.28% of total assets, followed by Gilead Sciences Inc (GILD - Free Report) and Kinder Morgan Inc (KMI - Free Report) .
The top 10 holdings account for about 24.65% of total assets under management.
Performance and Risk
SPHD seeks to match the performance of the S&P 500 Low Volatility High Dividend Index before fees and expenses. The S&P 500 Low Volatility High Dividend Index comprises of 50 securities traded on the S&P 500 Index that historically have provided high dividend yields and low volatility.
The ETF return is roughly 0.34% so far this year and it's up approximately 1.73% in the last one year (as of 02/23/2023). In the past 52-week period, it has traded between $39.01 and $49.24.
The ETF has a beta of 0.86 and standard deviation of 26.38% for the trailing three-year period, making it a medium risk choice in the space. With about 52 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P 500 High Dividend Low Volatility ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, SPHD is an outstanding option for investors seeking exposure to the Style Box - Large Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell 1000 Value ETF (IWD - Free Report) and the Vanguard Value ETF (VTV - Free Report) track a similar index. While iShares Russell 1000 Value ETF has $52.11 billion in assets, Vanguard Value ETF has $102.21 billion. IWD has an expense ratio of 0.18% and VTV charges 0.04%.
Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
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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Should Invesco S&P 500 High Dividend Low Volatility ETF (SPHD) Be on Your Investing Radar?
If you're interested in broad exposure to the Large Cap Value segment of the US equity market, look no further than the Invesco S&P 500 High Dividend Low Volatility ETF (SPHD - Free Report) , a passively managed exchange traded fund launched on 10/18/2012.
The fund is sponsored by Invesco. It has amassed assets over $3.86 billion, making it one of the average sized ETFs attempting to match the Large Cap Value segment of the US equity market.
Why Large Cap Value
Companies that fall in the large cap category tend to have a market capitalization above $10 billion. They tend to be stable companies with predictable cash flows and are usually less volatile than mid and small cap companies.
Carrying lower than average price-to-earnings and price-to-book ratios, value stocks also have lower than average sales and earnings growth rates. Looking at their long-term performance, value stocks have outperformed growth stocks in almost all markets. They are however likely to underperform growth stocks in strong bull markets.
Costs
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.30%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 3.92%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Real Estate sector--about 18% of the portfolio. Utilities and Consumer Staples round out the top three.
Looking at individual holdings, Altria Group Inc (MO - Free Report) accounts for about 3.28% of total assets, followed by Gilead Sciences Inc (GILD - Free Report) and Kinder Morgan Inc (KMI - Free Report) .
The top 10 holdings account for about 24.65% of total assets under management.
Performance and Risk
SPHD seeks to match the performance of the S&P 500 Low Volatility High Dividend Index before fees and expenses. The S&P 500 Low Volatility High Dividend Index comprises of 50 securities traded on the S&P 500 Index that historically have provided high dividend yields and low volatility.
The ETF return is roughly 0.34% so far this year and it's up approximately 1.73% in the last one year (as of 02/23/2023). In the past 52-week period, it has traded between $39.01 and $49.24.
The ETF has a beta of 0.86 and standard deviation of 26.38% for the trailing three-year period, making it a medium risk choice in the space. With about 52 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P 500 High Dividend Low Volatility ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, SPHD is an outstanding option for investors seeking exposure to the Style Box - Large Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell 1000 Value ETF (IWD - Free Report) and the Vanguard Value ETF (VTV - Free Report) track a similar index. While iShares Russell 1000 Value ETF has $52.11 billion in assets, Vanguard Value ETF has $102.21 billion. IWD has an expense ratio of 0.18% and VTV charges 0.04%.
Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
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.