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The Franklin International Low Volatility High Dividend Index ETF (LVHI) is designed to replicate the investment performance of its underlying benchmark, the Franklin International Low Volatility High Dividend Hedged Index. This index comprises stocks from developed economies situated outside the United States, specifically selecting companies that offer attractive dividend payouts while demonstrating stability in their share price and earnings.
Is LVHI's expense ratio expensive, average, or a steal for its category?
Pro reveals the verdict on a 5-tier spectrum calibrated against ICI 2025 industry averages, with strategy-aware bands so the comparison is meaningful.
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Franklin International Low Volatility High Dividend Index ETF is rated a "hold" in this initial coverage article, with a discussion centered around the benefits of its currency hedging strategy. LVHI has been one of the top-performing International ETFs over the last decade, but Index data shows how currency hedging contributed roughly 64 total return percentage points. Currency hedging obviously reduces direct FX exposure. However, currency forward contracts have embedded interest rate differentials, meaning LVHI investors are also exposed to changes in them.
The Fed's likely rate hike could create opportunities and risks across ETFs, with value, technology and energy in focus while homebuilders, leisure and small-caps face pressure.
Franklin Intl Low Volatility High Dividend Index ETF (LVHI) remains a buy, now primarily for its currency protection amid potential future interest rate hikes. LVHI's hedged strategy shields dividends from currency fluctuations, positioning it to outperform unhedged peers like VYMI and IDV if rates rise. With a 4.5% starting yield and a five-year dividend CAGR of 9.76%, LVHI offers attractive, growing income for long-term investors.