This is a passive ETF that tracks an index selecting US companies across various market capitalizations that combine relatively high dividend yields with low price and earnings volatility. It pursues stable dividends and low volatility together.

It suits conservative income investors who want stable dividends and low volatility at the same time.

It is an ETF managed by Franklin using a passive (index-tracking) approach.

From companies of various market capitalizations in the broad US market, it selects stocks that combine relatively high dividend yields with low price and earnings volatility. Weights are set by reflecting both dividends and low volatility, and caps on individual stock and sector weights help maintain diversification.

• Selection that reflects both high dividends and low volatility
• Diversification maintained through caps on stock and sector weights

Assets under management (AUM) stand at $661.9M, and the total expense ratio is 0.27% per year.

Unlike a simple high dividend ETF, it factors in volatility to pursue a relatively steady performance profile, but because of its defensive nature, gains may be smaller in a bull market.

Low volatility high dividend stocks are influenced by the interest rate environment and by investor preference for dividend and defensive styles. They can hold up relatively well when markets are uncertain or volatile, but gains may be comparatively small in a strong bull market driven by high risk appetite.

Money tends to flow into low volatility high dividend ETFs when demand for stable dividends and defensive diversification rises, and when risk appetite strengthens, funds sometimes shift toward growth stocks.

Stable dividends and low volatility are its strengths, while relative underperformance in bull markets, interest rate sensitivity and sector concentration are its weaknesses.

SPHD, XSHD and others shown in the table are ETFs that use the same high dividend, low volatility approach but differ in market capitalization range. For more exposure to high dividends, you can also compare SCHD (dividend quality), DVY (high dividend) and VYM (high dividend). These differ in selection criteria, volatility and expense ratio, so it is best to choose according to your investment style.

Here are the points to review before investing in LVHD. As a low volatility high dividend ETF, it is important to check in advance its relative underperformance in bull markets, interest rate sensitivity, sector concentration and expense level.

In a bull market with strong risk appetite, gains may be comparatively small, and given the nature of high dividend assets, it is affected during periods of rising interest rates. You should also consider that the weight of certain defensive sectors can grow large due to the nature of dividend stocks.

It is a passive ETF suited to conservative income investors who want stable dividends and low volatility together. If you want greater participation in market upside, a general market ETF may be the better choice, while LVHD can be an alternative if you want low volatility and high dividends.