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Invesco launches high-dividend, low-volatility ETFs


Invesco has launched the PowerShares S&P 500 High Dividend Low Volatility Index ETF (UHD) and PowerShares S&P Global ex Canada High Dividend Low Volatility Index ETF (GHD) on the NEO Exchange.

"For many investors, receiving a monthly dividend payment is their primary investment goal," says Christopher Doll, vice president, product and business strategy, PowerShares Canada.
UHD and GHD both provide a source of dividend income as well as growth potential from stock-price appreciation. Historically, dividends paid by companies have accounted for a significant portion of the total return provided by equities over the long term.
Both strategies invest in liquid, high-yielding equity securities from within their investment universe. By screening for dividend yield, the underlying indices are designed to provide a higher yield than their broader market benchmarks.
Following the high dividend screen, the strategies use a secondary screen for volatility, which is based on the standard deviation of price returns over the previous one-year trading period.
"Screening by dividend payment alone can expose investors to unwanted risk," says Doll. "The addition of a volatility screen helps mitigate the risk that a company's dividend yield is due to falling share value."
"S&P Dow Jones Indices continues to innovate in factor-based indices," says Shaun Wurzbach, managing director and global head of financial adviser channel at S&P Dow Jones Indices. "The S&P 500 Low Volatility High Dividend Index and the S&P Global 1200 Ex-Canada Low Volatility High Dividend Index selects lower volatility high-yielding stocks of the S&P 500 and the S&P Global 1200 Ex-Canada Index, respectively, serving as benchmarks for income-seeking investors." 

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