Investors favour high div & low vol smart beta strategies, finds PowerShares

Jun 1st, 2016 | By | Category: Equities

ETF STRATEGY NEWS! ETF Strategy is delighted to announce the launch of ETF Strategy Hub (hub.etfstrategy.com), an on-demand repository of webcasts, videos, podcasts and white papers. Debuting with Special Series on Technology & Innovation in China and the Digital Economy.


Low volatility, high dividend, and fundamentally weighted smart beta strategies are the three most popular choices with first time investors, according to research commissioned by global ETF issuer Invesco PowerShares.

High dividend and low volatility strategies favourite among smart beta investors, finds Invesco PowerShares

Bryon Lake, Head of Invesco PowerShares – EMEA.

Dividend and low volatility strategies attracted the most positive responses with 72% and 69% of first time smart beta users, respectively, stating they are likely to consider such strategies. Fundamentally weighted strategies came third, with 59% of first time smart beta users willing to consider the strategy.

Bryon Lake, Head of Invesco PowerShares – EMEA, commented in a statement: “The findings of this research are confirmed by our market experience. We launched the PowerShares S&P 500 High Dividend Low Volatility UCITS ETF one year ago, and it has since then significantly outperformed its benchmark and attracted strong asset inflows. We will continue to build out our suite of High Dividend Low Volatility products to meet the demand we see for more nuanced exposure to major equity markets. We think this will become increasingly important in the absence of broader equity market stability.”

The PowerShares S&P 500 High Dividend Low Volatility UCITS ETF (HDLV) has returned 17.45% since its inception in May 2015. During the same period, the S&P 500 Index returned 0.5%, after being knocked by global equity market volatility at the beginning of 2016.

“Movements in the S&P 500 Index during the late summer 2015 and early 2016 have provided test conditions for the ETF, which combines high dividend and low volatility screens,” said Lake. “Research we carried out highlighted the popularity of this combination, which is further evidenced by the inflows we have seen into the ETF.”

According to Morningstar research, the PowerShares S&P 500 High Dividend Low Volatility UCITS ETF has also attracted the second largest year-to-date net inflows of all Smart Beta UCITS ETFs launched in 2015. The assets under management of the ETF is $187.9m (as at 30 April 2016).

Tags: , , , , , , , , ,

Leave a Comment