If you’re interested in broad exposure to the Large Cap Blend segment of the US equity market, look no further than the Invesco S&P 500 Low Volatility ETF (SPLV), a passively managed exchange traded fund launched on 05/05/2011.
The fund is sponsored by Invesco. It has amassed assets over $10.95 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 fall in the large cap category tend to have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.
Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF’s expense ratio.
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 2.08%.
Sector Exposure and Top Holdings
It is important to delve into an ETF’s holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, 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% of the portfolio. Consumer Staples and Healthcare round out the top three.
Looking at individual holdings, Johnson & Johnson (JNJ) accounts for about 1.24% of total assets, followed by Pepsico Inc (PEP) and Duke Energy Corp (DUK).
The top 10 holdings account for about 8.38% 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 return is roughly 1.58% so far this year and is down about -1.88% in the last one year (as of 01/09/2023). In the past 52-week period, it has traded between $56.92 and $69.42.
The ETF has a beta of 0.69 and standard deviation of 22.89% for the trailing three-year period, making it a medium risk choice in the space. With about 111 holdings, it effectively diversifies company-specific risk.
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 $293.38 billion in assets, SPDR S&P 500 ETF has $361.49 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
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.
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Invesco S&P 500 Low Volatility ETF (SPLV): ETF Research Reports
Johnson & Johnson (JNJ) : Free Stock Analysis Report
Duke Energy Corporation (DUK) : 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
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