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Is Invesco S&P 500 High Dividend Low Volatility ETF (SPHD) a Strong ETF Right Now?
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A smart beta exchange traded fund, the Invesco S&P 500 High Dividend Low Volatility ETF (SPHD - Free Report) debuted on 10/18/2012, and offers broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
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
The fund is managed by Invesco. SPHD has been able to amass assets over $3.11 billion, making it one of the average sized ETFs in the Style Box - Large Cap Value. This particular fund, before fees and expenses, 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
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 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 4.37%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
For SPHD, it has heaviest allocation in the Real Estate sector --about 19.50% of the portfolio --while Utilities and Consumer Staples round out the top three.
Taking into account individual holdings, Altria Group Inc (MO - Free Report) accounts for about 3.32% of the fund's total assets, followed by Verizon Communications Inc (VZ - Free Report) and Kinder Morgan Inc (KMI - Free Report) .
The top 10 holdings account for about 26.18% of total assets under management.
Performance and Risk
The ETF has lost about -4.22% and is down about -7.50% so far this year and in the past one year (as of 08/28/2023), respectively. SPHD has traded between $39.01 and $46.11 during this last 52-week period.
The fund has a beta of 0.86 and standard deviation of 16.52% for the trailing three-year period, which makes SPHD a medium risk choice in this particular 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.
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 $49.88 billion in assets, Vanguard Value ETF has $100.20 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?
A smart beta exchange traded fund, the Invesco S&P 500 High Dividend Low Volatility ETF (SPHD - Free Report) debuted on 10/18/2012, and offers broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
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
The fund is managed by Invesco. SPHD has been able to amass assets over $3.11 billion, making it one of the average sized ETFs in the Style Box - Large Cap Value. This particular fund, before fees and expenses, 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
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 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 4.37%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
For SPHD, it has heaviest allocation in the Real Estate sector --about 19.50% of the portfolio --while Utilities and Consumer Staples round out the top three.
Taking into account individual holdings, Altria Group Inc (MO - Free Report) accounts for about 3.32% of the fund's total assets, followed by Verizon Communications Inc (VZ - Free Report) and Kinder Morgan Inc (KMI - Free Report) .
The top 10 holdings account for about 26.18% of total assets under management.
Performance and Risk
The ETF has lost about -4.22% and is down about -7.50% so far this year and in the past one year (as of 08/28/2023), respectively. SPHD has traded between $39.01 and $46.11 during this last 52-week period.
The fund has a beta of 0.86 and standard deviation of 16.52% for the trailing three-year period, which makes SPHD a medium risk choice in this particular 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.
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 $49.88 billion in assets, Vanguard Value ETF has $100.20 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.