Should Invesco S&P 500 Low Volatility ETF (SPLV) Be on Your Investing Radar?
The Invesco S&P 500 Low Volatility ETF (SPLV) was launched on 05/05/2011, and is a passively managed exchange traded fund designed to offer broad exposure to the Large Cap Blend segment of the US equity market.
The fund is sponsored by Invesco. It has amassed assets over $9.43 billion, making it one of the largest ETFs attempting to match the Large Cap Blend segment of the US equity market.
Why Large Cap Blend
Companies that find themselves in the large cap category typically have a market capitalization above $10 billion. They tend to be stable companies with predictable cash flows and are usually less volatile than mid and small cap companies.
Blend ETFs usually hold a mix of growth and value stocks as well as stocks that exhibit both value and growth characteristics.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.25%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 2.29%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Utilities sector--about 26.20% of the portfolio. Consumer Staples and Healthcare round out the top three.
Looking at individual holdings, Johnson & Johnson (JNJ) accounts for about 1.30% of total assets, followed by Coca-Cola Co/the (KO) and Pepsico Inc (PEP).
The top 10 holdings account for about 10.54% of total assets under management.
Performance and Risk
SPLV seeks to match the performance of the S&P 500 Low Volatility Index before fees and expenses. The S&P 500 Low Volatility Index consists of the 100 stocks from the S&P 500 Index with the lowest realized volatility over the past 12 months.
The ETF has lost about -5.97% so far this year and is down about -3.91% in the last one year (as of 03/13/2023). In the past 52-week period, it has traded between $56.92 and $69.42.
The ETF has a beta of 0.68 and standard deviation of 22.04% for the trailing three-year period, making it a medium risk choice in the space. With about 102 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P 500 Low Volatility ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, SPLV is a great option for investors seeking exposure to the Style Box - Large Cap Blend segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Core S&P 500 ETF (IVV) and the SPDR S&P 500 ETF (SPY) track a similar index. While iShares Core S&P 500 ETF has $289.49 billion in assets, SPDR S&P 500 ETF has $350.47 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Invesco S&P 500 Low Volatility ETF (SPLV): ETF Research Reports
CocaCola Company (The) (KO) : Free Stock Analysis Report
Johnson & Johnson (JNJ) : Free Stock Analysis Report
PepsiCo, Inc. (PEP) : Free Stock Analysis Report
SPDR S&P 500 ETF (SPY): ETF Research Reports
iShares Core S&P 500 ETF (IVV): ETF Research Reports
