Legg Mason Adds International High Dividend ETF That Limits Volatility

In light of ongoing global volatility, Legg Mason launched an international currency-hedged exchange traded fund version of its popular low-volatility, high-dividend strategy.

The newly added Legg Mason International Low Volatility High Dividend ETF (BATS: LVHI) will target international stocks that come with low volatility and high dividends. LVHI has a 0.40% expense ratio.

The new fund expands on the original Legg Mason Low Volatility High Dividend ETF (NasdaqGM: LVHD), which has been trading since December 15, 2015.


LVHI tries to reflect the performance of the QS International Low Volatility High Dividend Hedged Index, which tries to provide stable income through investments in stocks of profitable companies in developed markets outside the U.S. with relatively high dividend yields and lower price and earnings volatility while diminishing exposure to exchange-rate fluctuations between the U.S. dollar and other international currencies.

Specifically, the dividend screen targets companies that are projected to continue to pay relatively high dividends, and LVHI’s screen process also takes into consideration the country-specific tax treatment of dividends.

Related: Slow-and-Steady ETFs for a Volatile Market

The profitability screen filters stocks that have been profitable over the last four quarters and are projected to remain profitable over the next four quarters, so companies will have the earnings power to support their dividends.