5 min readBy Ron Koren ETF Insider
How does the COPX ETF work?
The COPX ETF is a specialized investment fund that focuses on a specific sector. This exchange-traded fund offers investors exposure to a range of companies in this sector.
The Xtrackers S&P SmallCap High Dividend Yield ETF (XSHD) is managed by Xtrackers, a brand of DWS Group. XSHD seeks to replicate the performance of the S&P SmallCap 600 Low Volatility High Dividend Index, which comprises 60 securities from the S&P SmallCap 600 Index known for high dividend yields and lower volatility. With a commitment to providing exposure to small-cap companies with attractive dividend yields, XSHD serves as an investment option for those seeking income potential within the small-cap segment of the market.
While the Xtrackers S&P SmallCap 600 High Dividend Yield ETF (XSHD) primarily aims to mirror the performance of the S&P SmallCap 600® Index, it also reflects the dividend distribution of its underlying securities. With a focus on high dividend-yielding small-cap stocks exhibiting lower volatility, XSHD typically distributes dividends on a quarterly basis. The ETF selects its constituents based on their dividend yields and volatility over the past 12 months, providing investors with a balanced approach to potential capital appreciation and dividend income.
The Invesco S&P SmallCap High Dividend Low Volatility ETF (XSHD) focuses on mirroring the performance of the S&P SmallCap 600 Low Volatility High Dividend Index. This index comprises 60 securities from the S&P SmallCap 600 Index, selected based on their historically high dividend yields and lower volatility. XSHD aims to capture the returns of small-cap stocks while prioritizing dividends and mitigating volatility. Employing a full replication methodology, XSHD invests in all index constituents to maintain proportionate exposure, offering investors a diversified approach to small-cap dividend-yielding stocks. As of the latest data available, XSHD's concentration in the financials sector indicates its focus on high-dividend securities within this industry.
The correlation aspect of the Xtrackers S& SmallCap High Dividend Yield ETF (XSHD) is essential for understanding its performance in relation to the S& SmallCap 600 Index. As XSHD aims to track high dividend-yielding, low volatility small-cap stocks, its correlation with dividend yield and market volatility is crucial for investors seeking income and stability within the small-cap segment. ETF Insider provides a comprehensive tool for studying correlations, enabling investors to analyze XSHD's correlation with other assets and sectors, facilitating informed decision-making and risk management strategies. Through its intuitive visualization tool, ETF Insider also illustrates the overlap between XSHD and its benchmark index, aiding investors in assessing portfolio diversification.
The XSHD ETF primarily focuses on the financials sector, with holdings concentrated in companies that historically offer high dividend yields while exhibiting lower volatility. This sector concentration is reflective of the underlying index's emphasis on selecting securities from the S&P SmallCap 600® Index with robust dividend profiles and reduced price fluctuations. By investing in these securities, the ETF aims to provide investors with exposure to small-cap companies in the financial sector while mitigating some of the volatility typically associated with this market segment. However, investors should note that the fund's concentration in one industry may result in heightened sensitivity to sector-specific risks.
The exposure characteristic of the Xtrackers S&P SmallCap High Dividend Yield ETF (XSHD) revolves around providing investors access to a selection of small-cap U.S. equities with high dividend yields and lower volatility. By tracking the S&P SmallCap 600 High Dividend Index, XSHD specifically targets 60 securities that historically offer both attractive dividend payouts and reduced price fluctuations. This focus allows investors to potentially benefit from the income-generating capabilities of dividend-paying stocks while aiming to mitigate some of the inherent volatility often associated with smaller companies.
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