Designed to provide broad exposure to the Style Box - Large Cap Value category of the market, the Franklin U.S. Low Volatility High Dividend Index ETF (LVHD) is a smart beta exchange traded fund launched on 12/28/2015.
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.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as 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.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
LVHD is managed by Franklin Templeton Investments, and this fund has amassed over $592.91 million, which makes it one of the average sized ETFs in the Style Box - Large Cap Value. 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.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.27%, making it on par with most peer products in the space.
LVHD's 12-month trailing dividend yield is 3.33%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
LVHD's heaviest allocation is in the Utilities sector, which is about 25.6% of the portfolio. Its Consumer Staples and Real Estate round out the top three.
When you look at individual holdings, Chevron Corp (CVX) accounts for about 2.79% of the fund's total assets, followed by Altria Group Inc (MO) and Johnson & Johnson (JNJ).
LVHD's top 10 holdings account for about 26.05% of its total assets under management.
Performance and Risk
So far this year, LVHD return is roughly 7.93%, and is up about 4.18% in the last one year (as of 10/14/2025). During this past 52-week period, the fund has traded between $37.37 and $41.55.
LVHD has a beta of 0.68 and standard deviation of 12.62% for the trailing three-year period. With about 121 holdings, it effectively diversifies company-specific risk .
Alternatives
Franklin U.S. Low Volatility High Dividend Index 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) tracks Dow Jones U.S. Dividend 100 Index and the Vanguard Value ETF (VTV) tracks CRSP U.S. Large Cap Value Index. Schwab U.S. Dividend Equity ETF has $69.6 billion in assets, Vanguard Value ETF has $147.7 billion. SCHD has an expense ratio of 0.06% and VTV changes 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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Franklin U.S. Low Volatility High Dividend Index ETF (LVHD): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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