DIV - LVHD's Big Price: Yield And Volatility Triumph Growth And Profits Stumble
2023-05-17 23:33:07 ET
Summary
- LVHD selects profitable U.S. securities expected to pay relatively high and sustainable dividends. Companies are further screened based on the attractiveness of their price and earnings volatility.
- The result is high concentration in defensive sectors like Utilities and Consumer Staples. LVHD's 0.72 five-year beta will likely appeal to risk-averse investors.
- However, I caution against ETFs that combine the yield and volatility factors. Most, including LVHD, do so by sacrificing growth and profitability. SPHD, LVHD's closest peer, is no different.
- Instead, I recommend building your portfolio around more well-rounded ETFs like SCHD. As this article demonstrates, SCHD's expected yield isn't much less than LVHD's, and you get so much more peace of mind with its high-quality selections.
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LVHD's Big Price: Yield And Volatility Triumph, Growth And Profits Stumble