Launched on December 28, 2015, the Franklin U.S. Low Volatility High Dividend Index ETF (LVHD) is a passively managed exchange traded fund designed to provide a broad exposure to the Large Cap Value segment of the US equity market.

The fund is sponsored by Franklin Templeton Investments. It has amassed assets over $626.89 million, making it one of the average sized ETFs attempting to match the Large Cap Value segment of the US equity market.

Why Large Cap Value

Companies that find themselves in the large cap category typically have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.

Value stocks are known for their lower than average price-to-earnings and price-to-book ratios, but investors should also note their lower than average sales and earnings growth rates. While value stocks have outperformed growth stocks in nearly all markets when you consider long-term performance, growth stocks are more likely to outpace value stocks in strong bull markets.

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 0.27%, putting it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 3.35%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation to the Utilities sector -- about 23.5% of the portfolio. Consumer Staples and Real Estate round out the top three.

Looking at individual holdings, Kimberly-Clark Corp (KMB) accounts for about 2.73% of total assets, followed by Johnson & Johnson (JNJ) and Altria Group Inc (MO).

The top 10 holdings account for about 24.79% of total assets under management.

Performance and Risk

LVHD seeks to match the performance of the QS Low Volatility High Dividend Index before fees and expenses. 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.

The ETF has added roughly 13.36% so far this year and is up roughly 13.86% in the last one year (as of 08/10/2026). In the past 52-week period, it has traded between $39.47 and $45.84.

The ETF has a beta of 0.58 and standard deviation of 11.72% for the trailing three-year period. With about 117 holdings, it effectively diversifies company-specific risk.

Alternatives

Franklin U.S. Low Volatility High Dividend Index 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, LVHD is a good option for those seeking exposure to the Style Box - Large Cap Value area of the market. Investors might also want to consider some other ETF options in the space.

The Schwab U.S. Dividend Equity ETF (SCHD) and the Vanguard Morningstar Value ETF (VTV) track a similar index. While Schwab U.S. Dividend Equity ETF has $105.96 billion in assets, Vanguard Morningstar Value ETF has $191.54 billion. SCHD has an expense ratio of 0.06% and VTV charges 0.03%.

Bottom-Line

Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.

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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Franklin U.S. Low Volatility High Dividend Index ETF (LVHD): ETF Research Reports

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

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