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

Making its debut on 10/18/2012, smart beta exchange traded fund Invesco S&P 500 High Dividend Low Volatility ETF (SPHD) provides investors 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.

However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.

Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.

While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.

Fund Sponsor & Index

Managed by Invesco, SPHD has amassed assets over $3.13 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

Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.

Annual operating expenses for SPHD are 0.30%, which makes it on par with most peer products in the space.

The fund has a 12-month trailing dividend yield of 3.99%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

For SPHD, it has heaviest allocation in the Real Estate sector --about 20.2% of the portfolio --while Consumer Staples and Utilities round out the top three.

Looking at individual holdings, Pfizer Inc (PFE) accounts for about 3.07% of total assets, followed by United Parcel Service Inc (UPS) and Altria Group Inc (MO).

SPHD's top 10 holdings account for about 26.89% of its total assets under management.

Performance and Risk

So far this year, SPHD has added roughly 4.55%, and is up about 6.75% in the last one year (as of 02/03/2026). During this past 52-week period, the fund has traded between $44.37 and $50.67.

The fund has a beta of 0.67 and standard deviation of 13.17% for the trailing three-year period, which makes SPHD a medium risk choice in this particular space. With about 51 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 $78.92 billion in assets, Vanguard Value ETF has $166.17 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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