PowerShares’ SPHD Targets High Dividends, Low Vol

Journal of Indexes Staff
January 02, 2013


Invesco PowerShares, seeking to build on the runaway success of its $3 billion PowerShares S&P 500 Low Volatility Portfolio (NYSE Arca: SPLV), launched an ETF in mid-Oct­ober that targets stocks that have both high dividends and low volatility.

The PowerShares S&P 500 High Dividend Portfolio (NYSE Arca: SPHD) tracks the S&P 500 Low Volatility High Dividend Index, which goes a step further than SPLV’s benchmark. The index consists of securities that have historically provided high-dividend yields in addition to lower volatility. The benchmark assigns greater weights to those securities with the highest dividend yields.

The selection process begins with picking the 75 highest-dividend-paying names from the S&P 500, and then narrows down to the 50 stocks that showed the lowest realized volatility in the previous 12 months, according to SPHD’s prospectus.

SPHD comes with a 0.30 percent annual expense ratio.


January/February 2013

Editor's Note