LVHD: Low Volatility Plus A 3.50% Dividend Yield, Should You Buy?

Summary

  • LVHD selects 50-100 low-volatile U.S. stocks that also pay high dividends. Its expense ratio is 0.27%, and LVHD manages $933 million in net assets.
  • Unlike the more popular SPHD, LVHD prioritizes the low-volatility factor. As a result, it's the least-volatile dividend ETF on the market, and I expect it to yield 3.50%.
  • However, investors using LVHD as an income instrument may be disappointed. I've estimated that it will take 16 years for LVHD's yield on cost to equal SPHD's.
  • This article analyzes the performance of 30 low-volatility ETFs before and after the five most significant market drawdowns over the last decade. LVHD's results were only average.
  • While my opinion on LVHD has improved since my last review in March 2021, I still don't view it as an appropriate long-term holding. Therefore, I've rated it as a hold.
  • Looking for a portfolio of ideas like this one? Members of Hoya Capital Income Builder get exclusive access to our subscriber-only portfolios. Learn More »

VOLATILITY AHEAD - Business Chalkboard Background

hanibaram

Investment Thesis

Last week, I reviewed the Invesco S&P 500 High Dividend Low Volatility ETF (SPHD), concluding that its 4.25% estimated dividend yield was attractive for income investors. Still, all other investors should avoid it due to its poor growth

SPY vs. SPHD vs. LVHD Sector Exposures

Morningstar

LVHD Top Ten Holdings

Franklin Templeton

Low-Volatility ETF Drawdowns And Recovery Performances

The Sunday Investor

LVHD vs. SPHD Performance

Portfolio Visualizer

LVHD Portfolio Income Growth

Portfolio Visualizer

LVHD Fundamentals By Company

The Sunday Investor

LVHD vs. SPHD vs. 50/50 SPHD/XLU vs. SPY Drawdowns

Portfolio Visualizer

LVHD vs. SPHD vs. 50/50 SPHD/XLU vs. SPY Performance

Portfolio Visualizer

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This article was written by

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Build sustainable portfolio income with premium dividend yields up to 10%.

I'm a data-driven ETF analyst who likes to do deep dives into how funds are constructed and what factors are likely to make them winners or losers. I have a database of over 700 ETFs that I follow, so I'm able to show readers the best- and worst-performing funds in each category with each one I review. My preference is for stocks to have strong cash-generating and debt management qualities. I welcome all questions, comments, and suggestions for improvement, and I enjoy my time engaging with the Seeking Alpha community.

I hold a Bachelors degree in Commerce with a major in Accounting and hold a Certificate in Advanced Investment Advice from the Canadian Securities Institute. I have also completed the Portfolio Management Techniques course, fulfilling the educational requirements for a Chartered Investment Manager (CIM) designation. I have passed CFA Level 1, and I am currently studying to become licensed to advise on options and derivatives in Canada. This past November, I became a contributor for the new Hoya Capital Income Builder Marketplace Service, and enjoy working with and sharing ideas with some of the best researchers on Seeking Alpha. Sign up for a free trial today! Hoya Capital Income Builder.

Disclosure: I/we have a beneficial long position in the shares of SPY either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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