Exchange Traded Funds (ETFs)

Enjoy Big Rewards with Low Risk Through This Fund

The Invesco S&P 500 High Dividend Low Volatility ETF (NYSEARCA:SPHD) tracks a dividend-yield-weighted index that is comprised of the least volatile, highest-dividend-yielding stocks in the S&P 500.

SPHD cherry-picks the U.S. equity market, rather than delivering the whole basket. It includes the 50 least volatile names chosen from a shortlist of the S&P 500’s 75 highest-dividend-yielding securities. The fund then weights selected stocks based on trailing 12-month dividend yield, with sector weights capped at 25%.

Looking a little like the broad large-cap market, SPHD tilts small and tends to overweight traditionally defensive industries such as utilities and basic materials. The fund might also underweight the more volatile technology and consumer cyclical companies. The index is rebalanced semi-annually.

The fund has amassed $3.7 billion in assets under management and has a 0.02% average spread. Its expense ratio is 0.30%, meaning it is relatively inexpensive to hold in relation to other exchange-traded funds, and it has a solid 3.23% dividend yield.

Chart Courtesy of StockCharts.com

Invesco S&P 500 High Dividend Low Volatility ETF has an MSCI ESG Fund Rating of AA based on a score of 8.39 out of 10. The MSCI ESG Fund Rating measures the resiliency of portfolios to long-term risks and opportunities arising from environmental, social and governance factors.

ESG Fund Ratings range from best (AAA) to worst (CCC). Highly rated funds consist of companies that tend to show strong and/or improving management of financially relevant environmental, social and governance issues. These companies may be more resilient to disruptions arising from ESG events.

I urge all interested investors to exercise their own due diligence in deciding whether this fund fits their own individual portfolio goals.

As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an email. You just may see your question answered in a future ETF Talk.

Jim Woods

Jim Woods is a 20-plus-year veteran of the markets with varied experience as a broker, hedge fund trader, financial writer, author and newsletter editor. Jim is the editor of Intelligence Report, Investing Edge, the Bullseye Stock Trader, and The Deep Woods (formerly the Weekly ETF Report). His books include co-authoring, “Billion Dollar Green: Profit from the Eco Revolution,” and “The Wealth Shield: How to Invest and Protect Your Money from Another Stock Market Crash, Financial Crisis or Global Economic Collapse.” He’s also ghostwritten many books and articles, as well as edited content for some of the investment industry’s biggest luminaries. His articles have appeared on many leading financial websites, including StockInvestor.com, InvestorPlace.com, Main Street Investor, MarketWatch, Street Authority, Human Events and many others. Jim formerly worked with Investor’s Business Daily founder William J. O’Neil, helping to author training courses in the CANSLIM stock-picking methodology. The independent firm TipRanks rates Jim the No. 3 financial blogger in the world (out of more than 6,000). TipRanks calculates that, since 2012, he's made 361 successful recommendations out of 499 total, earning a success rate of 72% and a +15.3% average return per recommendation. He is known in professional and personal circles as “The Renaissance Man,” because his expertise includes such varied fields as composing and performing music; Western horsemanship, combat marksmanship, martial arts, auto racing and bodybuilding. Jim holds a BA in philosophy from the University of California, Los Angeles, and is a former U.S. Army paratrooper. A self-described “radical for capitalism,” he celebrates the virtue of making money from his Southern California horse ranch.