With ETF investing, it is important to ensure that you research the ETFs available to ensure it is appropriate for your portfolio in line with the current and expected market situation.
Legg Mason has launched its International Low Volatility High Dividend ETF (LVHI), the international version of its Low Volatility High Dividend ETF (LVHD) which proved to be a great success. The international version was launched in late July.
More about LVHI
This ETF aims at following an index of equity securities from the developed markets beyond the US. These securities must have characteristics such as relatively high yield combined with low price and earnings volatility. The issuer claims that the fund gets rid of issues with currency translation since it reduces your exposure to the fluctuations that arise between the US dollar value and that of other currencies.
There are 120 stocks in the fund in total with no stock taking up over 3.02% of the portfolio. 40 bps is charged by the fund in fees, with the top three companies being Astrazeneca, Toyota and Glaxosmithkline.
Why This ETF could be Appropriate
This ETF could be ideal for a portfolio particularly because the international market could continue to go through this unpredictable and rocky patch because of various issues such as growth concerns, Brexit, turmoil in oil prices, and rate hike possibilities in the US. In this atmosphere there should be a strong demand for products with low volatility. These products do not usually provide great returns in bull markets, but can safeguard your portfolio to a significant extent in the event of a market crash.
You also know that, internationally, interest rates are pretty low. Negative rates are being practiced by Japan and the Euro zone, and many other countries are following suit. And, after six years, even the Bank of England has cut rates. So, in such a situation where the yield is pretty low, investors will be hunting for securities that generate good income.
The International Low Volatility High Dividend ETF satisfies the aforementioned features. That should attract the cautious investor. LVHI also seeks income from dividends that are sustainable so that a more reliable income can be offered to investors with lesser volatility plus a greater appreciation potential, unlike certain other dividend stocks that transfer to the investor the risks of payout cuts and volatility.
The earlier LVHD ETF has been successful for Legg Mason, securing assets worth $79.7 million in only seven months and gaining 16.7% year-to-date as of the 4th of August 2016. So, in spite of other dividend ETF competition, LVHI seems likely to achieve success.
Making the right choice is essential for successful ETF investing, as much as it is for online stock trading. TradeZero offers the resources and insight you need. Call us at +1 954-944-3885 or email email@example.com.
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