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Should Invesco S&P 500 High Dividend Low Volatility ETF (SPHD) Be on Your Investing Radar?
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Looking for broad exposure to the Large Cap Value segment of the US equity market? You should consider 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 $2.95 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
Large cap companies usually have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.
Value stocks have lower than average price-to-earnings and price-to-book ratios. They 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
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining 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 4.27%.
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 Utilities sector--about 19.30% of the portfolio. Real Estate and Materials round out the top three.
Looking at individual holdings, Altria Group Inc (MO - Free Report) accounts for about 3.06% of total assets, followed by Verizon Communications Inc (VZ - Free Report) and Kinder Morgan Inc (KMI - Free Report) .
The top 10 holdings account for about 26.11% 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 has gained about 5.74% so far this year and was up about 11.47% in the last one year (as of 05/08/2024). In the past 52-week period, it has traded between $37.32 and $44.40.
The ETF has a beta of 0.87 and standard deviation of 14.91% for the trailing three-year period, making it 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 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 excellent 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 Schwab U.S. Dividend Equity ETF (SCHD - Free Report) and the Vanguard Value ETF (VTV - Free Report) track a similar index. While Schwab U.S. Dividend Equity ETF has $54.93 billion in assets, Vanguard Value ETF has $114.14 billion. SCHD has an expense ratio of 0.06% and VTV charges 0.04%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also 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?
Looking for broad exposure to the Large Cap Value segment of the US equity market? You should consider 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 $2.95 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
Large cap companies usually have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.
Value stocks have lower than average price-to-earnings and price-to-book ratios. They 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
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining 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 4.27%.
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 Utilities sector--about 19.30% of the portfolio. Real Estate and Materials round out the top three.
Looking at individual holdings, Altria Group Inc (MO - Free Report) accounts for about 3.06% of total assets, followed by Verizon Communications Inc (VZ - Free Report) and Kinder Morgan Inc (KMI - Free Report) .
The top 10 holdings account for about 26.11% 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 has gained about 5.74% so far this year and was up about 11.47% in the last one year (as of 05/08/2024). In the past 52-week period, it has traded between $37.32 and $44.40.
The ETF has a beta of 0.87 and standard deviation of 14.91% for the trailing three-year period, making it 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 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 excellent 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 Schwab U.S. Dividend Equity ETF (SCHD - Free Report) and the Vanguard Value ETF (VTV - Free Report) track a similar index. While Schwab U.S. Dividend Equity ETF has $54.93 billion in assets, Vanguard Value ETF has $114.14 billion. SCHD has an expense ratio of 0.06% and VTV charges 0.04%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also 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.