LVHD - LVHD: Low-Volatility Ingredient Begets Lackluster Total Returns
2024-06-17 08:23:21 ET
Summary
- Passively managed LVHD targets less volatile, high-yield stocks selected from the Solactive U.S. Broad Market Index.
- Despite its comfortable downside capture, LVHD's total returns were a mere disappointment in the past, as it was incapable of keeping pace with the market during recoveries.
- LVHD's portfolio has a defensive tilt, with strong quality, appealing valuation, and a high dividend yield, yet growth is a weak spot.
- I believe LVHD is unappealing from a total return perspective. There are no arguments supportive of a rating upgrade.
The Franklin U.S. Low Volatility High Dividend Index ETF ( LVHD ) is a passively managed investment vehicle that offers a sophisticated solution to making dividend portfolios less vulnerable to the vagaries of the market cycle. That is to say, it is supposed to remove a meaningful amount of volatility from dividend investing while also not compromising on the yield, a proposition that looks clearly alluring at first blush. Alas, the reality is different....
LVHD: Low-Volatility Ingredient Begets Lackluster Total Returns