PowerShares
Expenses: 0.3%
Dividend Yield: 3.7%
“Smart beta” ETFs are increasingly the rage, with fund providers slicing and dicing various indices to get a better overall result than the original theme.
The PowerShares S&P 500 High Dividend Low Volatility Portfolio (NYSEARCA:SPHD), which has a dual mandate of seeking out low volatility but also high yield, as the name implies. It does that by taking the S&P 500’s components, then whittling that down to a group of 50 high-income stocks that have traded with the least volatility over the past 12 months.
The result has a lot of what you’d expect, though it looks a little different than a lot of basic blue-chip dividend funds.
You do have some can’t-miss income stalwarts like Verizon Communications Inc. (NYSE:VZ) and AT&T Inc. (NYSE:T). But the focus on yield also elevates real estate investment trusts (REITs) such as datacenter/storage outfit Iron Mountain Incorporated (NYSE:IRM) and shopping center specialist Kimco Realty Corp (NYSE:KIM).
Still, this fund boasts a beta of 0.67, which is loads less volatile than the S&P 500 (beta of 1), and it has even outperformed the index over the past three years. So while SPHD is defensive in nature, it still has some teeth.
Check out SPHD’s provider page for more information.