Designed to provide broad exposure to the Large Cap Value segment of the US equity market, the Franklin U.S. Low Volatility High Dividend Index ETF (LVHD) is a passively managed exchange traded fund launched on 12/28/2015.
The fund is sponsored by Franklin Templeton Investments. It has amassed assets over $579.65 million, 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 typically 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 are known for their lower than average price-to-earnings and price-to-book ratios, but investors should also note their lower than average sales and earnings growth rates. When you look at long-term performance, value stocks have outperformed growth stocks in nearly all markets. But in strong bull markets, growth stocks are more likely to be winners.
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 0.27%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 3.42%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Consumer Staples sector--about 24.40% of the portfolio. Utilities and Real Estate round out the top three.
Looking at individual holdings, Cisco Systems Inc (CSCO) accounts for about 2.65% of total assets, followed by Chevron Corp (CVX) and Medtronic Plc (MDT).
The top 10 holdings account for about 25.11% of total assets under management.
Performance and Risk
LVHD seeks to match the performance of the QS Low Volatility High Dividend Index before fees and expenses. The QS Low Volatility High Dividend Index provides stable income through investment in stocks of profitable U.S. companies with relatively high dividend yields, lower price and earnings volatility.
The ETF has gained about 7.90% so far this year and is up roughly 12.48% in the last one year (as of 07/28/2025). In the past 52-week period, it has traded between $37.37 and $41.26.
The ETF has a beta of 0.66 and standard deviation of 13.37% for the trailing three-year period. With about 122 holdings, it effectively diversifies company-specific risk.
Alternatives
Franklin U.S. Low Volatility High Dividend Index ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, LVHD is a good option for those seeking exposure to the Style Box - Large Cap Value area of the market. Investors might also want to consider some other ETF options in the space.
The Schwab U.S. Dividend Equity ETF (SCHD) and the Vanguard Value ETF (VTV) track a similar index. While Schwab U.S. Dividend Equity ETF has $71.33 billion in assets, Vanguard Value ETF has $141.62 billion. SCHD has an expense ratio of 0.06% and VTV charges 0.04%.
Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are 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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Franklin U.S. Low Volatility High Dividend Index ETF (LVHD): ETF Research Reports Chevron Corporation (CVX): Free Stock Analysis Report Cisco Systems, Inc. (CSCO): Free Stock Analysis Report Medtronic PLC (MDT): Free Stock Analysis Report Vanguard Value ETF (VTV): ETF Research Reports Schwab U.S. Dividend Equity ETF (SCHD): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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