Is Franklin U.S. Low Volatility High Dividend Index ETF (LVHD) a Strong ETF Right Now?

The Franklin U.S. Low Volatility High Dividend Index ETF (LVHD) was launched on 12/28/2015, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Large Cap Value category of the market.

What Are Smart Beta ETFs?

For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.

Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.

If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.

By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.

Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.

Fund Sponsor & Index

The fund is managed by Franklin Templeton Investments. LVHD has been able to amass assets over $622.94 million, making it one of the average sized ETFs in the Style Box - Large Cap Value. This particular fund, before fees and expenses, seeks to match the performance of the QS Low Volatility High Dividend Index.

The QS Low Volatility High Dividend Index provides stable income through investment in stocks of profitable U.S. companies with relatively high dividend yields, lower price and earnings volatility.

Cost & Other Expenses

For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.

Operating expenses on an annual basis are 0.27% for this ETF, which makes it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 3.37%.

Sector Exposure and Top Holdings

While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation in the Utilities sector - about 24.1% of the portfolio. Consumer Staples and Real Estate round out the top three.

Taking into account individual holdings, Coca-cola Co/the (KO) accounts for about 2.76% of the fund's total assets, followed by Johnson & Johnson (JNJ) and Us Bancorp (USB).

The top 10 holdings account for about 26.16% of total assets under management.

Performance and Risk

So far this year, LVHD return is roughly 12.79%, and is up roughly 11.47% in the last one year (as of 08/31/2026). During this past 52-week period, the fund has traded between $39.47 and $45.84.

The ETF has a beta of 0.58 and standard deviation of 11.70% for the trailing three-year period. With about 118 holdings, it effectively diversifies company-specific risk .

Alternatives

Franklin U.S. Low Volatility High Dividend Index ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.

Schwab U.S. Dividend Equity ETF (SCHD) tracks Dow Jones U.S. Dividend 100 Index and the Vanguard Morningstar Value ETF (VTV) tracks CRSP U.S. Large Cap Value Index. Schwab U.S. Dividend Equity ETF has $111.65 billion in assets, Vanguard Morningstar Value ETF has $192.47 billion. SCHD has an expense ratio of 0.06% and VTV changes 0.03%.

Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Value

Bottom Line

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

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This article originally published on Zacks Investment Research (zacks.com).

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