About

The Invesco S&P 500 High Dividend Low Volatility ETF (SPHD) is designed to provide investors with exposure to the performance of 50 of the least volatile, high-yielding stocks within the S&P 500 Index. The ETF aims to offer a balance of income and stability, making it an attractive option for those seeking consistent dividend payouts with reduced market volatility. With total assets amounting to 3.45 billion USD, SPHD is categorized under Large Value and has a net expense ratio of 0.30%, reflecting its cost-efficiency in delivering returns.

Launched on October 18, 2012, SPHD has grown to include 51 holdings, primarily in large-cap stocks with an average market cap of 49,441.55 million USD. The fund is managed passively, tracking the S&P 500 Low Volatility High Dividend Index, which is rebalanced semi-annually. This methodology ensures that the ETF remains aligned with its investment objective of capturing high dividend yields while maintaining low volatility.

The top ten holdings of SPHD reflect a diverse range of industries, contributing to its stable performance. Altria Group (MO) leads with a weight of 2.79%, followed closely by Kinder Morgan Inc (KMI) at 2.73%, and Verizon Communications (VZ) at 2.70%. Other notable holdings include AT&T (T), Crown Castle (CCI), and Bristol-Myers Squibb (BMY), each contributing significantly to the fund's high dividend yield of 3.46%.

These top assets are strategically selected for their ability to provide steady income streams while minimizing exposure to market fluctuations. The fund's focus on high-dividend-paying stocks within the S&P 500 ensures that it remains a reliable choice for income-focused investors seeking lower volatility in their equity investments.

Performance

The Invesco S&P 500 High Dividend Low Volatility ETF (SPHD) has demonstrated impressive performance metrics over recent periods. Year-to-date, the ETF has delivered a return of 22.11%, showcasing its resilience and ability to generate returns in fluctuating market conditions. Over the past 12 months, SPHD has achieved a remarkable return of 39.90%, highlighting its effectiveness in capitalizing on high-dividend opportunities while maintaining low volatility.

Best and Worst Performing Holdings

Among its holdings, Simon Property Group (SPG) stands out as the best performer over the past year, delivering a substantial return of 74.02%. This extraordinary performance underscores SPG's strategic positioning and ability to thrive in its sector. Kinder Morgan (KMI) and AT&T (T) also contributed significantly, with returns of 61.29% and 58.41% respectively, reflecting their strong operational execution and market positioning.

Conversely, Hormel Foods (HRL) and Pfizer (PFE) were among the least performing holdings, with returns of 2.11% and 1.50% respectively over the same period. These results indicate challenges faced by these companies in navigating market dynamics or sector-specific headwinds.

The diverse performance within SPHD's holdings illustrates the ETF's balanced approach, leveraging high-performing assets while mitigating risks associated with underperforming stocks. This strategy ensures that SPHD continues to offer attractive returns to its investors.

Risk

The Invesco S&P 500 High Dividend Low Volatility ETF (SPHD) is characterized by a low risk level over the past year, with an annualized standard deviation of 11.73%. This indicates that the ETF has maintained relatively stable price movements compared to broader market indices, aligning with its objective of reducing volatility while providing high dividend yields.

Among its top holdings, Bristol-Myers Squibb Company (BMY) exhibited the highest volatility with an annualized standard deviation of 26.87%, whereas Kinder Morgan Inc (KMI) showed the lowest volatility at 16.75%. These figures highlight the varying risk profiles within the ETF's portfolio, offering insights into potential areas of concern or stability.

SPHD's Sharpe ratio of 2.96 for the past year reflects its ability to deliver superior risk-adjusted returns, outperforming many peers in its category. However, investors should be mindful of potential downside risks, as indicated by a maximum drawdown of -5.23% and a value at risk (VaR) at a 99% confidence level of -2.32%.

Historical stress tests further illustrate SPHD's resilience during significant market events, such as the COVID-19 pandemic and geopolitical tensions like the Russian invasion of Ukraine. These tests underscore the ETF's capacity to withstand adverse conditions while maintaining its strategic focus on high dividend yields and low volatility.

Allocation

The Invesco S&P 500 High Dividend Low Volatility ETF (SPHD) maintains a strategic allocation across various asset classes, sectors, and regions to optimize returns while minimizing risk exposure. The ETF predominantly invests in US stocks, which constitute 97.64% of its asset class allocation, reflecting a strong emphasis on domestic equities.

Sectors such as Utilities (19.93%), Consumer Non-Durables (18.26%), and Finance (15.15%) dominate SPHD's sector allocation, highlighting its focus on industries that traditionally offer stable cash flows and high dividend yields. This sectoral diversification helps mitigate risks associated with sector-specific downturns while capitalizing on growth opportunities.

Regionally, SPHD is heavily weighted towards North America, with 97.77% of its investments concentrated in this region. This regional focus aligns with the ETF's strategy of leveraging established markets known for their economic stability and robust corporate governance frameworks.

Overall, SPHD's allocation strategy underscores its commitment to providing investors with a balanced portfolio that emphasizes income generation through dividends while maintaining exposure to low-volatility assets across diverse sectors and regions.

MSCI Thematic Exposure

The MSCI Thematic Exposure Standard provides valuable insights into how the Invesco S&P 500 High Dividend Low Volatility ETF (SPHD) aligns with emerging long-term trends shaping our future. This metric assesses assets based on their economic linkage to underlying themes, offering investors a comprehensive view of thematic relevance within their portfolios.

SPHD exhibits notable exposure scores across several key themes, including 'Rising Consumer' with an exposure score of 13.54%. This theme encompasses companies catering to health, recreation, and lifestyle needs driven by demographic shifts such as aging populations and millennial spending preferences. Top contributors include Kellanova, Verizon Communications Inc., and AT&T Inc., which collectively enhance SPHD's alignment with consumer-driven growth trends.

The 'Millennials' theme also features prominently with an exposure score of 7.24%, underscoring SPHD's investment in companies developing products targeting millennial preferences. Kellanova again plays a significant role alongside General Mills Inc., reinforcing SPHD's strategic positioning within this demographic segment.

Additionally, themes like 'Disruptive Technology' and 'Efficient Energy' reflect SPHD's commitment to investing in innovative sectors poised for future growth. These exposures highlight SPHD's adaptability in navigating evolving market landscapes while maintaining its core focus on high dividend yields and low volatility.

ETF Flows

The Invesco S&P 500 High Dividend Low Volatility ETF (SPHD) has experienced notable outflows over recent periods, reflecting shifting investor sentiment and broader market dynamics. Year-to-date, SPHD recorded net outflows of -72.1 million USD, representing -2.09% of its total assets under management (AUM). This trend highlights potential concerns among investors regarding market conditions or changes in investment strategies.

Over the past year, net outflows amounted to -202 million USD or -5.85% of AUM, indicating sustained pressure on SPHD's asset base despite its strong performance metrics. When compared to peers within the Invesco issuer group and US Equities - Dividend & Fundamental category, SPHD ranks lower in terms of net flows, suggesting competitive challenges in attracting new investments.

In contrast, thematic categories such as Healthy Nutrition ETFs have also faced outflows, albeit at higher rates than SPHD, indicating broader trends affecting specific investment themes. Meanwhile, GMO Involvement ETFs have seen positive net flows, highlighting investor interest in niche thematic exposures.

Overall, SPHD's recent ETF flows underscore the importance of adapting investment strategies to align with evolving market conditions and investor preferences while continuing to deliver on its core objectives of high dividends and low volatility.

News Analysis

Recent news surrounding key holdings within the Invesco S&P 500 High Dividend Low Volatility ETF (SPHD) provides valuable insights into potential impacts on its performance and risk profile. For instance, Verizon Communications has been actively involved in strategic acquisitions and partnerships aimed at expanding its market presence and enhancing subscriber growth through innovative offerings like flexible 5G plans (Reuters, October 22, 2024).

Conversely, Altria Group faces challenges from economic pressures and regulatory hurdles impacting its core business segments (Seeking Alpha, October 27, 2024). These developments could influence SPHD's overall risk-return dynamics given Altria's significant weighting within the ETF.

Kinder Morgan continues to demonstrate strong growth prospects driven by its strategic positioning in the natural gas sector (Seeking Alpha, October 28, 2024). This aligns with broader trends favoring infrastructure investments amid rising energy demands.

These news stories highlight both opportunities and risks associated with SPHD's top holdings, emphasizing the need for investors to remain informed about ongoing developments that may affect their investment outcomes.

News Sentiment Analysis

The sentiment analysis for key holdings within the Invesco S&P 500 High Dividend Low Volatility ETF (SPHD) provides a nuanced view of market perceptions based on historical news articles analyzed by EODHistoricalData.com. The sentiment scoring system ranges from -1 for negative sentiment to +1 for positive sentiment.

Altria Group has experienced predominantly negative sentiment recently, with an average score of -0.79 over the last week due to challenges in its core business areas. Conversely, Kinder Morgan has maintained a positive sentiment score of 1.00 over the past four weeks, reflecting favorable market perceptions regarding its growth prospects in the natural gas sector.

Verizon Communications also enjoys positive sentiment with an average score of 0.82 over four weeks, driven by strategic initiatives aimed at expanding subscriber bases through innovative offerings like flexible 5G plans. Meanwhile, AT&T shows moderate positive sentiment at 0.53 over the same period.

This sentiment analysis underscores varying perceptions among SPHD's top holdings, highlighting potential areas of strength or concern that may influence investor decisions and impact overall fund performance.

Market News

Recent global economic developments could have implications for the Invesco S&P 500 High Dividend Low Volatility ETF (SPHD). For instance, Japan's unemployment rate fell below expectations at 2.4% (FXStreet, October 28, 2024), signaling potential economic stability that may influence investor sentiment towards international markets.

The American economy remains robust according to Jamie Dimon (CNBC, October 28, 2024), which could support continued investment flows into US equities like those held by SPHD.

However, concerns about high stock valuations suggest caution among investors (InvestorPlace, October 28, 2024). This environment may prompt some investors to seek safer havens or adjust their portfolios towards more defensive positions such as those offered by dividend-focused ETFs like SPHD.

Overall, these market news stories highlight both opportunities and challenges facing SPHD as it navigates complex global economic landscapes while striving to deliver consistent income through high-dividend investments.

Sustainability Analysis

The sustainability profile of the Invesco S&P 500 High Dividend Low Volatility ETF (SPHD) reveals significant insights into its environmental impact. The fund reports carbon emissions of 487.4 metric tonnes per $1 million in sales, which is considerably higher than average benchmarks for similar companies. This highlights potential areas for improvement in terms of reducing environmental footprint.

This metric underscores the importance for SPHD to potentially engage more actively in sustainability initiatives or consider integrating more environmentally-friendly companies within its portfolio to align better with global sustainability goals.

The absence of detailed contributions towards United Nations Sustainable Development Goals suggests room for further development in aligning investments with broader ESG criteria that emphasize environmental responsibility alongside financial performance.

Investors concerned about sustainability may view these insights as crucial when evaluating SPHD's long-term viability and alignment with personal or institutional values focused on sustainable investing practices.

MSCI ESG Scores

The MSCI ESG Scores for the Invesco S&P 500 High Dividend Low Volatility ETF (SPHD) provide a comprehensive assessment of its environmental, social, and governance practices. With an overall ESG rating of 'A' and a total score of 6.91 described as 'Neutral,' SPHD demonstrates moderate alignment with ESG principles compared to industry standards.

The environmental score stands at 5.83 ('Neutral'), indicating room for improvement in minimizing environmental impact through strategic asset selection or enhanced corporate engagement on sustainability issues.

Socially, SPHD scores a neutral rating at 4.79 but notably includes companies where more than 30% have female directors—82.24%—highlighting a commitment towards gender diversity within corporate leadership structures.

Governance practices are also rated neutrally at 6.44; however, this suggests potential strengths in corporate governance frameworks that could be leveraged further to enhance overall ESG performance across all dimensions.

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