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Is Invesco S&P 500 High Dividend Low Volatility ETF (SPHD) a Strong ETF Right Now?
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The Invesco S&P 500 High Dividend Low Volatility ETF (SPHD - Free Report) made its debut on 10/18/2012, and is a smart beta exchange traded fund that provides 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.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix 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
SPHD is managed by Invesco, and this fund has amassed over $2.88 billion, which makes it one of the average sized ETFs in the Style Box - Large Cap Value. Before fees and expenses, SPHD seeks to match the performance of the S&P 500 Low Volatility High Dividend Index.
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.
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.
Annual operating expenses for SPHD are 0.30%, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 4.42%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
For SPHD, it has heaviest allocation in the Utilities sector --about 17.70% of the portfolio --while Real Estate and Materials round out the top three.
Taking into account individual holdings, At&t Inc (T - Free Report) accounts for about 3.28% of the fund's total assets, followed by Verizon Communications Inc (VZ - Free Report) and Simon Property Group Inc (SPG - Free Report) .
Its top 10 holdings account for approximately 28.15% of SPHD's total assets under management.
Performance and Risk
Year-to-date, the Invesco S&P 500 High Dividend Low Volatility ETF return is roughly 2.61% so far, and is up about 9.75% over the last 12 months (as of 03/15/2024). SPHD has traded between $37.32 and $43.62 in this past 52-week period.
SPHD has a beta of 0.87 and standard deviation of 14.89% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 51 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P 500 High Dividend Low Volatility ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
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 $54.53 billion in assets, Vanguard Value ETF has $112.73 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 Invesco S&P 500 High Dividend Low Volatility ETF (SPHD) a Strong ETF Right Now?
The Invesco S&P 500 High Dividend Low Volatility ETF (SPHD - Free Report) made its debut on 10/18/2012, and is a smart beta exchange traded fund that provides 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.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix 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
SPHD is managed by Invesco, and this fund has amassed over $2.88 billion, which makes it one of the average sized ETFs in the Style Box - Large Cap Value. Before fees and expenses, SPHD seeks to match the performance of the S&P 500 Low Volatility High Dividend Index.
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.
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.
Annual operating expenses for SPHD are 0.30%, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 4.42%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
For SPHD, it has heaviest allocation in the Utilities sector --about 17.70% of the portfolio --while Real Estate and Materials round out the top three.
Taking into account individual holdings, At&t Inc (T - Free Report) accounts for about 3.28% of the fund's total assets, followed by Verizon Communications Inc (VZ - Free Report) and Simon Property Group Inc (SPG - Free Report) .
Its top 10 holdings account for approximately 28.15% of SPHD's total assets under management.
Performance and Risk
Year-to-date, the Invesco S&P 500 High Dividend Low Volatility ETF return is roughly 2.61% so far, and is up about 9.75% over the last 12 months (as of 03/15/2024). SPHD has traded between $37.32 and $43.62 in this past 52-week period.
SPHD has a beta of 0.87 and standard deviation of 14.89% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 51 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P 500 High Dividend Low Volatility ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
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 $54.53 billion in assets, Vanguard Value ETF has $112.73 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.