Is SPHD’s High Dividend and Low Volatility Strategy Falling Short?

Introduction

When it comes to investing in ETFs, one popular option that investors often consider is SPHD. This ETF, managed by Invesco, seeks to provide investors with a combination of high dividend yields and low volatility. However, recent performance data suggests that SPHD may not be living up to expectations.

Performance Comparison

Despite its promise of high dividends and low volatility, SPHD’s returns have been lackluster compared to its counterparts. When compared to the S&P 500 ETF, SPY, SPHD fails to deliver competitive returns. In addition, SPHD also underperforms when compared to other dividend-focused ETFs such as SPLV and SPYD.

Dividend Decline

One of the key selling points of SPHD is its high dividend yield. However, investors should be cautious as the higher yield does not make up for the return deficit to SPY. Additionally, SPHD has seen declining payouts since 2020, making it a less attractive option for income-seeking investors.

Recommendation: Sell SPHD

Given the underperformance of SPHD compared to other ETFs and its declining dividend payouts, it may be wise for investors to avoid this ETF and consider alternative options. Investing in a combination of SPLV and SPYD, which individually outperform SPHD, could be a better strategy for investors looking for high dividends and low volatility.

Impact on Investors

For individual investors, holding SPHD in their portfolio may lead to lower returns and a decrease in dividend income over time. It is important for investors to reassess their investment strategies and consider reallocating their assets to more competitive ETFs.

Global Implications

While the underperformance of SPHD may not have significant global implications, it does highlight the importance of selecting the right investment vehicles for long-term growth and stability. Investors worldwide should pay attention to the performance of ETFs like SPHD and make informed decisions based on their financial goals and risk tolerance.

Conclusion

In conclusion, SPHD’s attempt to execute both a high dividend and low volatility strategy is not meeting expectations. With declining dividends and underperformance compared to other ETFs, it may be time for investors to reconsider their investment in SPHD and explore alternative options for better returns and stability in their portfolios.