Forget VIG, This High Yield ETF Cuts Checks Every Month
Cautious investors are loading up on exchange-traded funds (ETFs) amid the ongoing market uncertainty. 2025 has been all about navigating choppy waters, and we’re only four months away from 2026. The best way to beat uncertainty is to invest in…
Cautious investors are loading up on exchange-traded funds (ETFs) amid the ongoing market uncertainty. 2025 has been all about navigating choppy waters, and we’re only four months away from 2026. The best way to beat uncertainty is to invest in low-risk assets that have the potential to generate steady income. No, I’m not talking about dividend stocks.
Investing in stocks does carry a certain amount of market and industry risk. On the other hand, ETFs offer ultimate diversification, with low risk and low costs. This has made them the top investment product today. The ETF industry has gained tremendous momentum in 2025, and I think this trend could continue.
If you’re looking for a steady income, there are several ETFs worth considering. While the Vanguard Dividend Appreciation ETF (NYSEARCA:VIG) is well-known, it is time to look for other options. A compelling alternative, Invesco S&P 500 High Dividend Low Volatility ETF (NYSEARCA:SPHD) has a higher yield and pays monthly dividends.
The Fund
Launched in 2011, the Invesco S&P 500 High Dividend Low Volatility ETF is a top choice for income investors who prefer monthly dividends to cover expenses. The fund has a yield of 4.6% and an expense ratio of 0.30%. It tracks the S&P 500 index and holds 51 stocks.
With fewer stocks, each holding carries greater weightage, thus, increasing the potential to generate higher returns. The fund focuses on stocks that have the potential for a strong yield with lower volatility. It offers stability and an attractive yield by investing in real estate and utilities.
Its sector allocation is as follows:
Real estate: 23.14%
Consumer staples: 17.83%
Utilities: 13.58%
Financials: 11.62%
The Performance
VIG offers a dividend yield of 1.65%, while SPHD has a significantly higher yield of 4.63% . Additionally, SPHD holds 51 stocks as compared to VIG, which has 337. SPHD does not invest in technology, which sets it apart from VIG, which allocates 26% of the fund into tech stocks.
Invesco S&P 500 High Dividend Low Volatility ETF’s top 10 holdings include Altria Group Inc., Pfizer, Verizon Communications, United Parcel Service, and Kraft Heinz Co. No stock has a weightage higher than 4%. Each of these companies is a strong dividend payer with a record of increasing dividends. It also has some of the more common dividend payers such as PepsiCo, Johnson & Johnson, Merck, and Chevron.
The ETF limits 10 stocks for each sector, ensuring that it doesn’t incline towards a single industry, thus reducing volatility.
SPHD invests in the real estate sector, allowing you to own a part of the industry without a large financial commitment. Several ETFs are highly focused on the tech sector, and this is where SPHD sets itself apart.
The Strength
The ETF holds some of the most financially stable companies in the industry. Its holdings are based on a strong balance sheet and a history of consistent dividend payments. SPHD has a beta of 0.85, which shows lower volatility compared to the broader market. ETFs with a beta higher than 1 are more volatile than the broad market. For context, Microsoft, the tech giant, has a beta of 1.05.
With $3.1 billion in assets under management, SPHD ensures steady growth with low volatility. The fund has added about 1.80% so far this year and 0.12% in 12 months. Its NAV is $49.23, and the 52-week high and low are $51.88 and $43.40.
Vandita Jadeja is a financial publisher with over a decade of experience writing about financial topics, including investment, savings, retirement, insurance and banking. Vandita is a Chartered Accountant who loves to debunk financial concepts for readers.
Her work has appeared on sites that include The Motley Fool, InvestorPlace, and Benzinga. She covers investing and focuses on stock picks and price prediction for 24/7 Wall St.
When not looking for the next stock investment opportunity, she can be found traveling, reading, chasing sunsets and enjoying her iced latte.
All of us could use a little more monthly income; it’s not just for retired folks anymore. Considering the state of the economy and the rising household expenses, the idea of receiving a monthly…
Passive income investors like me are always on the lookout for different ways to generate extra income. If you can make your money work for you, why not? I believe investing should not only…
Whether you’re enjoying your retirement or still planning for your golden years, generating a steady source of monthly income will be your primary goal. While investing in dividend stocks can help build a passive…
Building an investment portfolio that can fund your retirement requires you to pick assets that can withstand the market’s ups and downs. The idea is to build a portfolio that doesn’t require regular checkups…
If you are in your retirement years, building wealth through the stock market might not be the best idea. It doesn’t mean you need to chase the next growth stock or time the market.…
The stock market has had a great start to 2026, and its upward trend has continued so far. However, it doesn’t mean that the rally will keep going. There’s a risk of AI bubble…
Whether you’re already retired or planning for it, the one thing you don’t want to worry about is the money. If you plan your finances well, you can have a comfortable retirement. This is…
It is never too late to start your investment journey, and if you’re a beginner, investing in exchange-traded funds (ETFs) can be a great choice. ETFs can be ideal for investors due to the…
Investors seeking a regular income from their holdings may benefit from dividend-paying exchange-traded funds (ETFs). They are gaining popularity amid market uncertainty and have become an integral part of the portfolio for investors seeking…
