The two things worried investors should be focusing on right now for their portfolios are high yields and low volatility. The market has been anything but stable this year and keeping down risk is more important than ever before. Dividend income, meanwhile, can help boost your returns and help make up for underperforming stocks in your portfolio.
One exchange-traded fund (ETF) that can help address both of those needs is the Invesco S&P 500 High Dividend Low Volatility ETF (NYSE Arca: SPHD). It focuses on stocks that have "historically have provided high dividend yields and low volatility" and it is rebalanced twice a year, in January and July. The fund is well-diversified and its largest sector is utilities, which accounts for a little more than one-fifth of the fund's weight. Consumer staples is the next largest sector at just under 20%, followed by real estate at 12%, and health care at the only other one that is more than 10%.
Some of the top stocks in the fund include big names with high yields that investors are likely more than familiar with, including Kraft Keinz (NASDAQ:KHC), Verizon Communications (NYSE:VZ), and International Business Machines (NYSE:IBM).
The fund currently averages a 30-day yield of 3.5%. That's well above the payout you can expect from the average S&P 500 stock where the yield is less than 1.4%. The ETF is also reasonably valued, with its price-to-earnings ratio averaging just over 15. And its expense ratio of 0.30% also is fairly modest compared to other ETFs.
Overall, if you're looking for a safe place to park your money for the long term, the Invesco S&P 500 High Dividend Low Volatility ETF looks like a great option.
