ETF Trends
ETF Trends

One of the prominent themes seen in the exchange traded funds industry last year was the debut of ETFs from some big-name money managers that previously were not involved in the business. That theme is continuing again this year as asset manager Legg Mason made its ETF debut in January with four smart beta funds.

The quartet includes a dividend strategy, the Legg Mason Low Volatility High Dividend ETF (NasdaqGM: LVHD).

LVHD focuses on U.S. equity stocks with relatively high yield and low price and earnings volatility, and the fund also targets profitable companies. The ideas is that a stock’s ability to sustain strong dividends is associated with lower volatility.

“LVHD is based on an enhanced index that is primarily made up of large and mid-cap companies from a universe of over 3,000 stocks.  The inclusion of smaller market capitalizations may ultimately set this ETF apart from its peers and offer a differentiated exposure than its large-cap competition,” according to a post on Nasdaq.com.

LVHD should help investors who are seeking new sources of yield in a changing market environment. LVHD selects U.S. equity stocks with relatively high yield and low price and earnings volatility, and the fund also focuses profitable companies.

“TThe fund charges an expense ratio of 0.30% and its top holdings include VZ, Eaton Corp PLC (ETN), and Cummins Inc (CMI).  The emphasis on companies having shown a historical pattern of lower relative volatility may be attractive for more conservative or risk averse investors as well,” according to Nasdaq.

CORRECTION: updated LVHD’s underlying strategy.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.