Is Invesco S&P 500 High Dividend Low Volatility ETF (SPHD) a Strong ETF Right Now?

Launched on 10/18/2012, the Invesco S&P 500 High Dividend Low Volatility ETF (SPHD) is a smart beta exchange traded fund offering broad exposure to the Style Box - Large Cap Value category of the market.

What Are Smart Beta ETFs?

The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.

Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.

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.

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 sponsored by Invesco. It has amassed assets over $3.06 billion, making it one of the larger ETFs in the Style Box - Large Cap Value. Before fees and expenses, SPHD 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.

Operating expenses on an annual basis are 0.30% for this ETF, which makes it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 3.87%.

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.

Representing 22.8% of the portfolio, the fund has heaviest allocation to the Real Estate sector; Consumer Staples and Utilities round out the top three.

Looking at individual holdings, Pfizer Inc (PFE) accounts for about 2.96% of total assets, followed by Altria Group Inc (MO) and Healthpeak Properties Inc (DOC).

Its top 10 holdings account for approximately 26.12% of SPHD's total assets under management.

Performance and Risk

So far this year, SPHD has gained about 3.12%, and is down about -1.67% in the last one year (as of 12/04/2025). During this past 52-week period, the fund has traded between $44.37 and $50.72.

SPHD has a beta of 0.67 and standard deviation of 13.46% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 53 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.

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 $71.68 billion in assets, Vanguard Value ETF has $153.66 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

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This article originally published on Zacks Investment Research (zacks.com).

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