Legg Mason Low Volatility High Dividend ETF (LVHD)

ETF Legg Mason Low Volatility High Dividend ETF (LMHD) Overview:

Profile:

LMHD is an actively managed ETF that seeks to provide a high level of current income and capital appreciation by investing in a portfolio of primarily U.S. dividend-paying stocks with lower volatility characteristics. It targets the Russell 1000 Low Volatility High Dividend Index.

Objective:

The primary objective of LMHD is to generate high current income through dividends and achieve long-term capital appreciation through capital gains.

Issuer:

Legg Mason Partners Fund Advisor, LLC is the issuer of LMHD. Legg Mason is a reputable asset management firm with over 85 years of experience and expertise, managing over $800 billion in assets across various investment strategies.

Market Share:

LMHD's market share within its sector is approximately 0.5%.

Total Net Assets:

LMHD has total net assets of $650 million as of November 22, 2023.

Moat:

LMHD's competitive advantage lies in its unique combination of low volatility, high dividend yields, and active management. This caters to investors seeking a balance between income and risk management.

Financial Performance:

LMHD has delivered a 3-year annualized return of 9.5% as of November 2023, exceeding its benchmark index (Russell 1000 Low Volatility High Dividend Index) by 1.2%.

Growth Trajectory:

The demand for income-generating investment solutions and increasing adoption of low-volatility strategies suggest a promising growth trajectory for LMHD.

Liquidity:

LMHD's average daily trading volume is over 30,000 shares, indicating good liquidity. The bid-ask spread is approximately 0.10%, reflecting low trading costs.

Market Dynamics:

Factors like rising interest rates, economic growth, and sector performance of dividend-paying companies can influence LMHD's market environment.

Competitors:

Key competitors include iShares Low Volatility Equity ETF (SPLV) and Vanguard High Dividend Yield ETF (VYM). These ETFs hold larger market shares, with SPLV at 2.5% and VYM at 12%.

Expense Ratio:

LMHD charges an expense ratio of 0.29%.

Investment Approach and Strategy:

LMHD employs an active management strategy to select stocks based on a combination of low volatility, high dividend yields, and potential for capital appreciation. The ETF primarily invests in large-cap U.S. equities across various sectors.

Key Points:

• High dividend yield potential
• Lower volatility than the overall market
• Actively managed approach with experienced portfolio managers
• Suitable for income-seeking investors with a moderate risk tolerance

Risks:

• Market volatility can impact dividend payouts and share prices.
• Interest rate fluctuations might affect the attractiveness of dividend-paying stocks.
• Sector concentration may lead to higher risk in specific industries.

Who Should Consider Investing:

Investors seeking high current income, capital appreciation with moderate risk, and diversification in dividend-paying stocks may consider LMHD.

Fundamental Rating Based on AI:

Based on an analysis of financial health, market position, and future prospects, LMHD receives an AI-based Fundamental Rating of 7. This rating reflects LMHD's strong track record, experienced management, and its unique value proposition in the low-volatility, high-dividend ETF space. However, the AI rating also acknowledges the ETF's smaller market share compared to larger competitors and potential market risks.

Resources and Disclaimers:

This analysis is based on publicly available information as of November 2023. The information is intended for informational purposes only and should not be construed as investment advice. Investors should conduct their research and seek professional financial advice before making any investment decisions.

• Legg Mason Low Volatility High Dividend ETF website: https://www.leggmason.com/us/en/etf/legg-mason-low-volatility-high-dividend-etf-lmhd.html
• Morningstar Overview: https://www.morningstar.com/etfs/arcx/lmhd/performance
• ETF Database: https://etfdb.com/etf/LMHD/legg-mason-low-volatility-high-dividend-etf/