Leadership exhibited by the utilities sector this year has not been confined to sector-specific exchange traded funds.
Utilities’ reputation as high-yielding, steady alternative to certain bonds, combined with declining Treasury yields, has bolstered an array of dividend ETFs. Some of those funds are household names. Others are not, but residing in the latter category, as does the PowerShares S&P 500 High Dividend Portfolio (SPHD) , is not a slight. [Utilities Helping Other ETFs, Too]
Albeit quietly, SPHD is proving as much. The ETF s up 3.2% in the past month and 8.8% over the past 90 days. SPHD debuted in October 2012 and there are signs investors are finally starting to take notice of this combination high dividend/low volatility ETF, which pays a monthly dividend and sports a trailing 12-month yield of 3.36%. [The Perfect ETF to Recommend to Your Grandparents]
On Monday, SPHD gained a third of a percent on volume that was more than triple the daily average. The ETF is flirting with all-time highs in an environment where only a scant percentage of the nearly 1,600 U.S.-listed exchange traded products are making new highs, illustrating the benefit of SPHD’s 26.7% utilities sector allocation. That is the fund’s largest sector weight by nearly 880 basis points over consumer staples, according to PowerShares data.
SPHD is not small. It has $159.1 million in assets under management, but in another indication that investors are waking up to this ETF, SPHD had $142 million in AUM at the start of 2014. Over the past month, investors have poured $10.3 million into SPHD.
SPHD tracks the S&P 500 Low Volatility High Dividend Index, which is comprised of 50 stocks taken from the S&P 500 that have historically exhibited high dividend yields and low volatility.
At a time when small-caps are showing signs of vulnerability and investors are prizing value over growth, SPHD offers an outlet for investors to gain escape under siege momentum names without going to cash or bonds.
The ETF only holds large- and mid-cap stocks, a combined 62.1% of which are considered value stocks. SPHD charges 0.3% and currently resides just 2% below its 52-weeek high.
PowerShares S&P 500 High Dividend Portfolio
- Investment & Company Information