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The Franklin U.S. Low Volatility High Dividend Index ETF (LVHD) was launched on 12/28/2015, and is a passively managed exchange traded fund designed to offer broad exposure to the Large Cap Value segment of the US equity market.
The fund is sponsored by Franklin Templeton Investments. It has amassed assets over $568.88 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
Companies that find themselves in the large cap category typically have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.
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. Looking at their long-term performance, value stocks have outperformed growth stocks in almost all markets. They are however likely to underperform growth stocks in strong bull markets.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
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 2.77%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, 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 25.90% of the portfolio. Utilities and Industrials round out the top three.
Looking at individual holdings, Lockheed Martin Corp (LMT) accounts for about 3.02% of total assets, followed by Johnson & Johnson (JNJ) and Cvs Health Corp (CVS).
The top 10 holdings account for about 26.01% 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 lost about -3.91% so far this year and it's up approximately 6.25% in the last one year (as of 07/20/2022). In the past 52-week period, it has traded between $35.76 and $41.12.