The surge in 10‑year Treasury yields, which topped levels not seen in 17 years, followed a similar jump in 30‑year yields just weeks earlier, echoing a pattern that preceded the global financial crisis of 2008, according to seasoned market participants.
While a rising yield curve is not a guaranteed predictor of economic contraction, investors have long used bond‑market movements as an early warning sign of slowing growth, and the latest data has reignited that sentiment.
In that context, analysts highlighted the Invesco S&P 500 High Dividend Low Volatility ETF (ticker SPHD) as a potential hedge. The fund, which manages about $3.4 billion in assets, will turn 14 years old next month.
SPHD focuses on high‑dividend, low‑volatility stocks within the S&P 500. Its portfolio is weighted heavily toward consumer staples and healthcare, sectors that have historically outperformed during recessions; together they account for roughly 28.4 % of the fund’s holdings.
The ETF’s top positions include Verizon (3.42 % of assets), Pfizer (3.41 %) and General Mills (3.08 %). Notably, the fund excludes technology stocks, which are often among the worst‑performing sectors in downturns.
SPHD offers a dividend yield of about 4.8 %, roughly four times the yield of the broader S&P 500, and pays dividends monthly rather than quarterly, providing investors with a steadier income stream.
Performance during past downturns has been mixed. The fund lagged the S&P 500 during the brief 2020 recession but posted a modest 0.6 % gain in 2022, a year when the S&P 500 fell 18.2 %. Its expense ratio stands at 0.30 %, or $30 per $10,000 invested.
Analysts caution that while SPHD is designed to be less volatile and to hold up better than the broader market in a recession, it is not immune to losses and may not rise in all bear markets. Nonetheless, its dividend focus and sector composition make it an attractive option for risk‑averse investors seeking recession‑proof exposure.