Income ETFs – PowerShares S&P 500 High Dividend Portfolio (SPHD)
The PowerShares S&P 500 High Dividend Portfolio (SPHD) has a lot going for it as income ETFs go.
For starters, the ETF has relatively low volatility, which is what one would hope from a fund tracking the S&P 500 Low Volatility High Dividend Index. This index tracks 50 stocks with about a quarter of them allocated to utilities. It is otherwise diversified into only large- and mid-cap stocks, of which roughly two-thirds are in my favorite style: value. That creates even more opportunity for upside.
There are plenty of holdings to like in SPHD, including Health Care REIT (HCN) and FirstEnergy Corporation (FE), while current top holding Pepco Holdings (POM) recently agreed to a buyout offer from No. 3 holding Exelon (EXC).
Meanwhile, the fund yields well more than 3% while costing a lean 0.3%, or $3 for every $1,000 invested, in expenses.