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SPHD: It Could Be Time To Rotate Into Low-Volatility High-Yield Stocks With This ETF

Published Fri, 25 Sep 2020 16:13:24 -0400 on Seeking Alpha

Seeking AlphaETF AnalysisSPHD: It Could Be Time To Rotate Into Low-Volatility High-Yield Stocks With This ETFSep. 25, 2020 4:13 PM ET|| About: Invesco S&P 500 High Dividend Low Volatility Portfolio ETF (SPHD), Includes: SDY, VIG, VYMby: JuniusJunius Long/Short Equity, Value, Growth At Reasonable Price, ContrarianSummarySPHD could be positioned to benefit from the Fed's low interest rate environment and a possible rotation out of growth and momentum stocks.
A 1-year beta of 1.15 shows the ETF may actually be more volatile than the market and have greater cyclical risks.
Its past performance may not be a selling point, but that's because of the pro-momentum, pro-growth, and anti-value rally that has been driving the stock market recently.
The recent sharp stock market sell-off is another reminder that many stocks continue to trade in overbought conditions. The valuations of growth stocks, particularly those in the tech sector, are still trading at dizzyingly high levels, but this month's stock market volatility shows investors are becoming increasingly worried about the dangers ahead.
Yet, with the Fed likely to keep interest rates lower for longer, investors have few attractive places to park their cash and earn reasonable returns. Dividend stocks are one area that is seeing growing attention from financial commentators, especially since the yield spread between high dividend stocks and investment-grade corporate bonds has risen close to historic highs. Additionally, value investing, which has massively fallen out of favor for many years now, could be about to make a comeback as the performance gap between the least and most expensive stocks has only gotten wider since the pandemic.
With this in mind, the Invesco S&P 500 High Dividend Low Volatility ETF (SPHD) could be about to break its multi-year cycle of chronic underperformance.
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Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
VANGUARD HIGH DIVIDEND YIELD ETF 89.75   0.0 0.00 0.00 2.79
SPDR S&P DIVIDEND ETF 103.80   0.0 0.00 2.42 2.36
VANGUARD DIVIDEND APPRECIATION ETF 120.84   0.0 0.00 0.00 1.58

VANGUARD HIGH DIVIDEND YIELD ETF - VYM
VANGUARD HIGH DIVIDEND YIELD ETF - VYM  


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