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Is Invesco S&P 500 High Dividend Low Volatility ETF (SPHD) a Strong ETF Right Now?
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Launched on 10/18/2012, the Invesco S&P 500 High Dividend Low Volatility ETF (SPHD - 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?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
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.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
SPHD is managed by Invesco, and this fund has amassed over $3.01 billion, which makes it one of the average sized ETFs in the Style Box - Large Cap Value. Before fees and expenses, this particular fund 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
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.
Annual operating expenses for SPHD are 0.30%, which makes it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 4.17%.
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.
For SPHD, it has heaviest allocation in the Utilities sector --about 19.50% of the portfolio --while 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) .
Its top 10 holdings account for approximately 26.11% of SPHD's total assets under management.
Performance and Risk
Year-to-date, the Invesco S&P 500 High Dividend Low Volatility ETF has gained about 8.26% so far, and is up roughly 18.31% over the last 12 months (as of 05/17/2024). SPHD has traded between $37.32 and $45.34 in this past 52-week period.
The ETF has a beta of 0.87 and standard deviation of 14.80% 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 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 $56.14 billion in assets, Vanguard Value ETF has $116.92 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 Invesco S&P 500 High Dividend Low Volatility ETF (SPHD) a Strong ETF Right Now?
Launched on 10/18/2012, the Invesco S&P 500 High Dividend Low Volatility ETF (SPHD - 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?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
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.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
SPHD is managed by Invesco, and this fund has amassed over $3.01 billion, which makes it one of the average sized ETFs in the Style Box - Large Cap Value. Before fees and expenses, this particular fund 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
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.
Annual operating expenses for SPHD are 0.30%, which makes it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 4.17%.
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.
For SPHD, it has heaviest allocation in the Utilities sector --about 19.50% of the portfolio --while 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) .
Its top 10 holdings account for approximately 26.11% of SPHD's total assets under management.
Performance and Risk
Year-to-date, the Invesco S&P 500 High Dividend Low Volatility ETF has gained about 8.26% so far, and is up roughly 18.31% over the last 12 months (as of 05/17/2024). SPHD has traded between $37.32 and $45.34 in this past 52-week period.
The ETF has a beta of 0.87 and standard deviation of 14.80% 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 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 $56.14 billion in assets, Vanguard Value ETF has $116.92 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.