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Should Invesco S&P 500 Low Volatility ETF (SPLV) Be on Your Investing Radar?

Looking for broad exposure to the Large Cap Blend segment of the US equity market? You should consider 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 $11.08 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

Large cap companies usually 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.

Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.

Costs

Investors should also pay attention to an ETF’s expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain 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 2.01%.

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 25.60% of the portfolio. Consumer Staples and Industrials round out the top three.

Looking at individual holdings, Johnson & Johnson (JNJ) accounts for about 1.30% of total assets, followed by Verizon Communications Inc (VZ) and Pepsico Inc (PEP).

The top 10 holdings account for about 12.22% 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 -5.90% so far this year and is down about -0.30% in the last one year (as of 09/06/2022). In the past 52-week period, it has traded between $58.54 and $69.42.

The ETF has a beta of 0.68 and standard deviation of 22.22% for the trailing three-year period, making it a medium risk choice in the space. With about 103 holdings, it effectively diversifies company-specific risk.

Alternatives

Invesco S&P 500 Low Volatility ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, SPLV is a reasonable option for those seeking exposure to the Style Box – Large Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.

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 $293.82 billion in assets, SPDR S&P 500 ETF has $355.62 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.

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Invesco S&P 500 Low Volatility ETF (SPLV): ETF Research Reports
 
Johnson & Johnson (JNJ) : Free Stock Analysis Report
 
Verizon Communications Inc. (VZ) : 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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