Legg Mason Low Volatility High Dividend ETF (LVHD)

Legg Mason Low Volatility High Dividend ETF (LVHD): An Overview

Profile:

LVHD is an actively managed ETF that seeks to provide a high level of current income and capital appreciation through investments in dividend-paying common stocks that exhibit below-average volatility. It primarily invests in large-cap and mid-cap U.S. stocks across various sectors, with a focus on those with strong dividend yields and moderate price fluctuations.

Objective:

The fund's primary goal is to generate high current income through dividend payments and offer some capital appreciation with lower volatility compared to broader market indices.

Issuer:

LVHD is issued by Legg Mason Asset Management, a subsidiary of Franklin Resources, Inc. (BEN).

Issuer Reputation and Reliability:

Franklin Resources, Inc. is a well-established global investment management firm with a solid reputation and a long track record of success.

Management:

The portfolio management team of LVHD has extensive experience in equity research and portfolio construction, specializing in selecting dividend-paying stocks with low volatility characteristics.

Market Share:

LVHD has a small market share in the high-dividend ETF category, approximately 0.2%.

Total Net Assets:

As of November 3, 2023, LVHD had approximately $435 million in total net assets.

Moat:

LVHD's competitive advantages include its active management approach, focus on low-volatility dividend-paying stocks, and experienced portfolio managers.

Financial Performance:

Since its inception in 2015, LVHD has delivered a total return of 8.6%, outperforming the S&P 500 Index by roughly 2.1% over the same period.

Benchmark Comparison:

LVHD has historically outperformed the S&P 500 High Dividend Index, with lower volatility.

Growth Trajectory:

LVHD has experienced steady growth in assets under management since its inception.

Liquidity:

LVHD has an average daily trading volume of approximately 100,000 shares, indicating relatively good liquidity.

Bid-Ask Spread:

The average bid-ask spread for LVHD is around 0.05%, which is considered tight and indicative of good liquidity.

Market Dynamics:

Factors affecting LVHD's market environment include interest rate levels, economic growth, and investor sentiment towards high-dividend and low-volatility strategies.

Competitors:

Key competitors in the high-dividend ETF space include:

• SPDR S&P Dividend ETF (SDY)
• Vanguard High Dividend Yield ETF (VYM)
• iShares Select Dividend ETF (DVY)

Expense Ratio:

LVHD's expense ratio is 0.59%, which is slightly higher than some of its competitors.

Investment Approach and Strategy:

LVHD employs an active management strategy and focuses on investing in low-volatility dividend-paying stocks across various sectors. The fund holds a well-diversified portfolio of around 60-70 stocks.

Key Points:

• High dividend yield
• Lower volatility compared to broader market indices
• Actively managed portfolio
• Experienced management team
• Steady growth trajectory

Risks:

• Market risk: The value of LVHD's holdings can fluctuate due to market movements.
• Interest rate risk: Rising interest rates can negatively impact dividend-paying stocks.
• Dividend risk: Companies may reduce or discontinue dividend payments.
• Volatility risk: Although LVHD focuses on low-volatility stocks, it is not immune to market fluctuations.

Who Should Consider Investing:

LVHD is suitable for investors seeking current income and capital appreciation with moderate risk tolerance. It is a good option for investors who want to diversify their portfolio and access a basket of low-volatility dividend-paying stocks.

Fundamental Rating Based on AI (1-10): 7.5

Based on an AI analysis considering various factors, including financial health, market position, and future prospects, LVHD receives a fundamental rating of 7.5 out of 10. This indicates a solid overall profile with promising growth potential. The analysis considered factors such as historical performance, portfolio composition, management experience, and competitive landscape.

Resources:

• Legg Mason Low Volatility High Dividend ETF website: https://www.leggmason.com/us/en/etfs/etf-detail.html/etfId/627
• Yahoo Finance: https://finance.yahoo.com/quote/LVHD/

Disclaimer:

This information is for educational purposes only and should not be considered investment advice. Please consult a qualified financial advisor before making any investment decisions.