Altria

Kinder Morgan

Bristol-Myers

AT&T

Verizon

Crown Castle International

ONEOK

Simon Property Group

Vici Properties

Dominion Energy

Invesco S&P 500 High Dividend Low Volatility ETF

SPHD tracks a dividend-yield-weighted index comprising the least volatile, highest dividend-yielding S&P 500 stocks.

The Invesco S&P 500 High Dividend Low Volatility ETF focuses on high dividend-paying stocks that are further filtered based on the realized volatility levels. While the current dividend yield of 4.3% in combination with low vol-focused strategy might indicate an enticing investment case, there are several drawbacks of SPHD that make it less attractive. In this article, I elaborate on SPHD's stock selection process and outline several reasons why I would not commit my capital here.

SPHD: Too Low Dividend To Justify The Opportunity Cost

AGFiQ U.S. Market Neutral Anti-Beta Fund

KFA Mount Lucas Index Strategy ETF

Simplify Multi-Qis Alternative ETF

Cambria Tail Risk ETF

After a sturdy run so far this year, Wall Street started to waver in mid-March, following the release of hot U.S. inflation data and the rise in bond yields.

5 Low-Risk ETFs to Play Now as Inflation Ticks Up

WisdomTree Emerging Markets High Dividend Fund

WisdomTree Global High Dividend Fund

WisdomTree U.S. High Dividend Fund

WisdomTree International High Dividend Fund

AAM S&P Emerging Markets High Dividend Value ETF 

Enbridge

Enterprise Products Partners

Fidelity High Dividend ETF

Xtrackers MSCI All World ex US High Dividend Yield Equity ETF

Xt EAFE Div Yld Shs

iShares Core High Dividend ETF

Voya Asia Pacific High Dividend Equity Income Fund

Voya Emerging Markets High Income Dividend Equity Fund

Invesco KBW High Dividend Yield Financial ETF

Legg Mason Low Volatility High Dividend ETF

Legg Mason International Low Volatility High Dividend ETF

Newmont Mining

Schwab US Dividend Equity ETF

ETRACS 2xMonthly Pay Leveraged US Small Cap High Dividend ETN

AAM S&P 500 High Dividend Value ETF

SPDR Portfolio S&P 500 High Dividend ETF

Timothy Plan High Dividend Stock ETF

Vanguard Real Estate ETF

Dividend stocks, including REITs and utilities, have underperformed in recent years. Rising interest rates and increasing costs of capital have contributed to the underperformance. The beginnings of a strong dividend stock rally may have just begun on the back of some very good news.

Very Good News For Dividend Stocks

SPHD is showing signs of re-emerging as dividend investors return to focusing on yield more than dividend growth. SPHD has underperformed the much more popular SCHD, but that tends to be a cyclical situation and I see many reasons for that cycle to change. SPHD gets a buy rating from me with a 2-3 year time frame in mind.

SPHD: Dividend ETF May Be Poised To Overtake SCHD

Invesco S&P 500 High Dividend Low Volatility ETF has underperformed in the last year, five years, and ten years compared to the S&P 500 index. The US stock market is expected to continue its bull run in 2024, driven by tech stocks, healthcare, and industrial sectors. SPHD is likely to underperform in a bullish market due to its focus on low volatility stocks, particularly in the utility and consumer defensive sectors. Investors may find better risk-adjusted returns in dividend growth ETFs.

SPHD: 2024 Could Be Another Down Year, Consider Other Options

The allure of high-octane large- and mega-cap growth stocks is undeniable. Investors' devotion to the asset class has been rewarded with impressive returns.

This High Dividend ETF Could Have 2024 Tailwinds

iShares Edge MSCI Min Vol Global ETF

Vanguard Short-Term Bond ETF

iShares Edge MSCI Min Vol Emerging Markets ETF

iShares Edge MSCI Min Vol EAFE ETF

iShares Preferred and Income Securities ETF 

Invesco S&P 500 Low Volatility ETF

Utilities Select Sector SPDR Fund

Invesco S&P MidCap Low Volatility ETF

It's been a volatile few years for the stock market, and that has investors sniffing out low-volatility ETFs. Just understand their strengths and their limitations.

Best Low-Volatility ETFs for When the Market is a Roller Coaster

Dividend investors should look beyond the S&P 500's largest stocks for higher yields, and focus in smaller sectors like Utilities and Real Estate. The Invesco S&P 500® High Dividend Low Volatility ETF is attractively priced and had a record high total payout last year. The SPHD ETF has a diverse and defensive portfolio, low expense ratio, and positive technical indicators, making it a buy-rated ETF in my view.

SPHD: Go Into 2024 With This High-Yield, Defensive Tilting ETF

Warren Buffett said that passive income snowballs are the key to financial independence. ETFs can be a great vehicle for building a passive income snowball. We compare two popular dividend ETFs and share our take on which one makes for a better passive income snowball.

SCHD Vs. SPHD: Only One Is A Worthy Passive Income Snowball

A snapshot of the price action of the first week of the year where the S&P 500 incurred losses while Invesco S&P 500 High Dividend Low Volatility ETF gained useful. SPHD's outperformance could continue as uncertainty grapples the market due to mixed economic data, a potential delay in rate cuts, and a political upheaval. In this case, the ETF's defensive sectors like utilities could play a key role in the upside.

SPHD ETF: Dividends And Defensive Sectors To Navigate Uncertainty

Apple

Simplify Tail Risk Strategy ETF

Overstretched valuations and uncertainty around when the Fed will begin to cut rates have dampened investors' optimism. Investors are increasingly exploring diversified strategies that help to protect their portfolios from downside risk.

Low-Risk ETFs to Consider Amid the Market Turmoil

Pacer US Small Cap Cash Cows 100 ETF

Invesco QQQ

Real Estate Select Sector SPDR Fund

Invesco S&P SmallCap Value with Momentum ETF

The Santa Claus Rally refers to the jump in stock prices in the week between Christmas and New Year's Day.

Has Santa Claus Rally Set In? 5 Best ETF Areas to Explore

As we covered here in the Digest, the Federal Reserve's Dot Plot showed a median forecast of three quarter-point interest rate cuts in 2024. This was up from just one projected rate cut in the September Dot Plot.

How to Find the Best Dividend Stocks

Broadstone Net Lease

Bank of Nova Scotia

Chimera Investment

Canadian Imperial Bank of Commerce

Cisco Systems

Diageo

GlaxoSmithKline

Haleon PLC

Illinois Tool Works

Leggett & Platt

McDonald's

MDU Resources Group

Medical Properties Trust

NetApp

Realty Income Corp

Orion Office REIT

Paramount Global

Philip Morris

TotalEnergies SE

Visa

Vanguard Dividend Appreciation ETF

Vanguard S&P 500 ETF

Growing dividend income takes time and consistency. The Fed paused a rate hike in September and will likely remain in a holding pattern for November, with a modest chance of an increase in December. Increase passive income by consistently investing in the market and letting dividend reinvestment do the trick.

Dividend Income Summary: Lanny's October 2023 Summary

SPDR MSCI USA StrategicFactors ETF

SPDR S&P Dividend ETF

iShares Edge MSCI Min Vol USA ETF

Morgan Stanley strategist Wilson believes that this is just a bear market rally rather than a start of a prolonged uptrend, as quoted on CNBC.

Is This a Bear Market Rally? ETF Strategies to Win

Since my cautionary review in February, SPHD has underperformed the broader market by 14%. Investors continue to collect generous monthly dividends, but at the expense of capital appreciation. The reason is SPHD's poor methodology which selects only 50 stocks and prioritizes the high-yield factor above all others, including quality, dividend growth, and even low volatility. SPHD's latest semi-annual changes resulted in 18 substitutions that increased the portfolio's volatility, which is now on par with SCHD, a high-dividend ETF of significantly higher quality.

SPHD: Don't Assume This 5.27% Yielding S&P 500 Dividend ETF Is High Quality

Alerian MLP ETF

SPDR Bloomberg 1-3 Month T-Bill ETF

Innovator S&P 500 Buffer ETF - October

Global X Robotics & Artificial Intelligence ETF

Manager Directed Portfolios - iM DBi Managed Futures Strategy ETF

Amplify CWP Dividend & Option Income ETF

iShares Robotics & Artificial Intelligence Multisector ETF

JPMorgan Equity Premium Income ETF

MUSQ Global Music Industry ETF

Flexshares US Quality Low Volatility Index Fund

iShares MSCI USA Quality Factor ETF

ROBO Global Robotics and Automation ETF

ALPS Sector Dividend Dogs ETF

iShares 1-3 Year Treasury Bond ETF

Neos S&P 500 High Income ETF

iShares 20+ Year Treasury Bond ETF

VictoryShares Free Cash Flow ETF

Vanguard High Dividend Yield ETF

Consumer Staples Select Sector SPDR Fund

Consumer Discretionary Select Sector SPDR Fund

SPDR S&P Oil & Gas Exploration & Production ETF

Global X S&P 500 Covered Call ETF

Hello, VettaFi Voices! Whenever I read about the economy in 2023, the one word that comes up repeatedly in various forms is “uncertain.

VettaFi Voices On: Risk Management in an Uncertain Economy

Invesco S&P SmallCap Low Volatility ETF

Low-volatility ETFs have the potential to outpace the broader market in bearish conditions or an uncertain environment, providing significant protection to the portfolio.

Low Volatility ETFs to Outperform: Here's Why

Arbor Realty Trust

Clearway Energy

WisdomTree US Quality Dividend Growth Fund

Global X SuperDividend US ETF

Intel

NextEra Energy

SPDR S&P 500 ETF Trust

The conundrum for dividend investors is whether to invest in high-yield stocks or low-yielding stocks with fast dividend growth. Higher yields benefit accumulators by reinvesting dividends into more shares, but dividend growth typically generates higher total returns. For withdrawers, high yield has some obvious benefits but also some potential pitfalls, while some argue dividend growth is the best way to go even for retirees.

High Yield Or Fast Dividend Growth? Have Your Cake And Eat It Too

Invesco's S&P 500 High Dividend Low Volatility ETF underperforms compared to similar funds and market benchmarks. The fund's emphasis on low volatility seems ineffective, as its price movements closely follow other indexes during market downturns. SPHD's sector allocation in utilities and consumer staples limits its growth potential, and its dividend growth rate remains negative.

SPHD: Poor Performance Overshadows Monthly Pay

Low-volatility ETFs have the potential to outpace the broader market in bearish conditions or in an uncertain environment, providing significant protection to the portfolio.

Low-Volatility ETFs to Bet Amid Market Volatility

The Invesco S&P 500 High Dividend Low Volatility ETF aims to deliver dividend income from low-volatility stocks in the S&P 500. SPHD's strategy prioritizes low volatility over high dividends, with securities selected based on volatility first and dividends second. While SPHD has delivered price appreciation and impressive total returns over the past decade, we are concerned about how it performed in the last period of heightened volatility.

SPHD: The Dividend Isn't Worth The Risk

VanEck Morningstar Wide Moat ETF

VanEck Vectors Morningstar International Moat ETF

Invesco S&P 500 Enhanced Value ETF

Vanguard Value ETF

Some market participants are now of the view that the first-half Wall Street rally has come to an end and a challenging market is waiting for us.

Is a Volatile Market Awaiting Us? ETF Strategies to Follow

Recent volatility is a reminder that the market still moves with the whims of investor sentiment when absorbing financial news. In a rate-sensitive environment such as now, if investors can get low volatility with high dividends, it's a win-win — enter the Invesco S&P 500 High Dividend Low Volatility ETF (SPHD).

Counter More Rate Hikes and Increased Volatility With This ETF

DIV and SPHD focus on US-based high-yielders that have a relatively low volatility quotient. DIV is broader in its reach, but its predilection towards small and micro-caps has so far worked against it. DIV offers a better yield profile, is cheaper to own, and offers better earnings potential.

DIV Vs. SPHD - Battle Of The High-Yielding Low-Vol Space

News for Invesco S&P 500 High Dividend Low Volatility ETF ETF (SPHD)