PowerShares to Introduce Low Vol High Dividend ETF


Invesco's (NYSE:IVZ) PowerShares unit, the fourth-largest U.S. ETF issuer, said it expects to introduce the PowerShares S&P 500 High Dividend Portfolio (NYSE:SPHD) on Thursday October 18. The new ETF, which will track the S&P Low Volatility High Dividend index, is expected to be home to the 50 S&P constituents that historically have provided high dividend yields with lower volatility, according to PowerShares.

"The PowerShares S&P 500 High Dividend Portfolio (SPHD) combines two key objectives that are important to many investors today: an emphasis on high dividend equities with the well-documented benefits of low-volatility securities," said Ben Fulton, Invesco PowerShares managing director of global ETFs, in a statement. "The Fund's underlying Index is designed to perform well in absolute terms and on a risk-adjusted basis compared to the S&P 500 Index, and had an average dividend yield of 4.51% as of Sept 30, 2012."

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SPHD will join PowerShares' already successful lineup of low volatility products. The PowerShares S&P 500 Low Volatility Portfolio (NYSE:SPLV) is one of the pioneers of the "low vol" ETF space. SPLV debuted in May 2011 and has almost $2.5 billion in assets under management.

The PowerShares S&P Emerging Markets Low Volatility Portfolio (NYSE:EELV) debuted in January and now has $13.5 million in AUM while the PowerShares S&P International Developed Low Volatility Portfolio (NYSE:IDLV), which also debuted in January, has $16.7 million in AUM.

SPHD's index is screened for the 75 securities with the highest dividend yields over the past 12 months and from those securities, selects the 50 securities with the lowest realized volatility for inclusion in the Underlying Index, according to the statement. The stocks with the highest yields receive the largest weights in the index, which is rebalanced semi-annually.

For more on volatility ETFs, click here.

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