TPHD: A Steady Beacon in Volatile Markets – Optimizing Dividends with Controlled Risk

In 2025, investors face a landscape riddled with geopolitical tensions, shifting interest rates, and market volatility. Amid this uncertainty, the pursuit of stable income remains a top priority. Enter the Timothy Plan High Dividend Stock ETF (TPHD), which combines a focus on high-yielding large-cap stocks with a proprietary volatility-weighted methodology and biblically responsible investing (BRI) criteria. This unique blend positions TPHD as a compelling solution for income-focused investors seeking to navigate turbulent markets while minimizing risk.

Volatility-Weighted Strategy: Engineering Stability

TPHD's core innovation lies in its volatility-weighted index, which systematically reduces exposure to unstable stocks. The ETF tracks the Victory US Large Cap High Dividend Volatility Weighted BRI Index, composed of the top 100 dividend-paying large-cap companies from the Nasdaq Global Index. These firms are selected based on their positive earnings over four consecutive quarters, ensuring financial resilience.

The weighting mechanism is key: stocks are ranked by their daily standard deviation of price changes over the past 180 trading days. Less volatile stocks receive higher allocations, while more volatile ones are underweighted. This approach aims to dampen portfolio fluctuations, even during market turbulence.

The result is a portfolio designed to outperform traditional dividend ETFs while exhibiting lower volatility. For instance, TPHD's historical annualized standard deviation of 12.96% (as of July 2025) contrasts sharply with the S&P 500's 15.3% over the same period, suggesting a smoother ride for investors.

Biblically Responsible Investing (BRI): A Hidden Stability Factor

Beyond financial metrics, TPHD incorporates the eVALUEator BRI filter, which excludes companies involved in industries such as alcohol, tobacco, gambling, pornography, or military weapons. This ethical screen isn't just a moral stance—it's a risk-mitigation tool.

Firms in excluded sectors often face higher regulatory, reputational, or operational risks. By avoiding them, TPHD reduces exposure to companies prone to abrupt valuation swings or activist campaigns. The BRI criteria also align with growing investor demand for ESG-compliant investments, further insulating the portfolio from sector-specific downturns.

Dividend Yield: Attractive Income with Lower Volatility Risk

TPHD's dividend strategy delivers a current yield of 2.01%, supported by consistent monthly distributions. Recent payments include $0.06 per share on July 9, 2025, with prior dividends reaching up to $0.1035 in June. While yields fluctuate with share price changes, the fund's focus on large-cap, financially stable firms reduces the risk of dividend cuts.

Critically, TPHD's yield is achieved without compromising on risk control. Unlike many high-yield ETFs that chase income by overexposing to volatile sectors, TPHD's volatility-weighted approach ensures that even its top-yielding stocks contribute to stability.

Performance and Risk Considerations

Since inception, TPHD has returned an average annualized 9.77%, outperforming its benchmark, the Russell 1000® Value Index, which averaged 8.2% over the same period. While past performance isn't a guarantee, TPHD's methodology offers a logical edge: it combines high-dividend equities (a traditional income source) with systematic volatility controls (a modern risk-mitigation tool).

Risks remain, of course. Dividends are never guaranteed, and geopolitical shocks or sector-specific crises could impact performance. However, the fund's BRI criteria and volatility weighting act as dual safeguards, reducing exposure to companies and industries prone to abrupt declines.

Investment Advice for 2025

In today's uncertain environment, TPHD stands out as an income-focused ETF with a defensive tilt. Its appeal lies in three pillars:
1. Predictable Income: Consistent monthly distributions align with retirement or income portfolios.
2. Volatility Control: The 180-day standard deviation weighting and BRI screen reduce downside risk.
3. Large-Cap Stability: Focus on financially robust firms minimizes the risk of sudden earnings shocks.

Investors seeking to avoid chasing yield in volatile markets should consider TPHD as a core holding. Pair it with other defensive assets, such as short-term bonds or gold, to further diversify risk.

Conclusion

In 2025, income investors face a stark choice: accept high volatility for higher yields, or prioritize stability at the cost of returns. TPHD offers a third path—a blend of dividend appeal and risk mitigation—making it a standout option for those seeking to navigate uncertainty without sacrificing their financial goals.

For further analysis, review TPHD's latest fact sheet or contact the fund directly at +1 (800) 846-7526. As always, consult a financial advisor to tailor this strategy to your unique circumstances.