ETF Talk: Gather Gains Globally with This Fund
Lou Reed once crooned that we should take a “Walk on the Wild Side,” and for any of my readers who are familiar with that specific song, understand that things are not always better on said “wild side.” So, today, we are taking a walk on the tame side… albeit the international one.
The Franklin International Low Volatility High Dividend Index ETF (LVHI) is an international-investing exchange-traded fund (ETF) that tracks an all-cap index of developed ex-U.S. stocks, selected and weighted to emphasize profitability, high dividends, low price volatility and low earnings volatility. LVHI explicitly aims for what the issuer calls “stable yield.” The fund’s use of technical and fundamental factors in search of dividend sustainability sets it apart from many competing funds which rely solely on the latter.
LVHI considers the volatility of prices and earnings in addition to yield and positive earnings. The fund culls a relative handful of names from its broad parent index using this approach, and weights them in the same fashion, subject to constraints. Specifically, the fund’s REITs and country exposure is capped at 15%, while geographic exposure will not exceed 50%. Also, issuers are capped at 2.5%, and sectors are capped at 25%.
The fund has assets under management of around $4.07 billion and an expense ratio of 0.40%. It is currently up 4.83% over the last month, 12.72% over the last three months and 6.11% year to date.
Chart courtesy of StockCharts.com.
Top holdings include Canadian Natural Resources Limited (CNQ.TO), 2.67%; Suncor Energy Inc. (SU.TO), 2.64%; Intesa Sanpaolo S.p.A. (ISP.MI), 2.37%; Shell Plc (NYSE: SHEL), 2.35%; Novartis AG (NOVN.SW), 2.30%; Rio Tinto plc (NYSE: RIO), 2.20%; Roche Holding Ltd Dividend Right Cert. (ROG.SW), 2.16%; Bank of Nova Scotia (BNS.TO), 2.02%; GSK plc (GSK.L), 1.98% and Mitsubishi Corporation (8058.T), 1.96%.
While we’re walking on the tame side today, you may still find this journey too wild for your portfolio. Investors should always do their due diligence before adding any stock or ETF to their portfolios.
Finally, 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.
