This article was originally published on ETFTrends.com.
A post-Thanksgiving plunge saw the markets head downward for two days before Wednesday saw the Dow Jones Industrial Average gain 100 points to end the slide. However, if more volatility is ahead for the month of December, there are certain ETFs that perform well when volatility spikes.
The Cboe Volatility Index is widely used as an indicator of measuring the ebbs and flows of volatility in the markets. Using the latest and greatest analytics tools from Kensho, CNBC was able “to track the top exchange-traded fund performers when the VIX, a measure of the 30-day implied volatility of U.S. stocks, popped 5 points or more in a month.”
Here are five funds they came up with to consider when volatility decides to drop in on the capital markets like Santa on Christmas Eve:
iShares Gold Trust (IAU) : seeks to reflect generally the performance of the price of gold and the performance before payment of the Trust’s expenses and liabilities. The Trust does not engage in any activities designed to obtain a profit from, or to ameliorate losses caused by, changes in the price of gold. The advisor intends to constitute a simple and cost-effective means of making an investment similar to an investment in gold.
SPDR Gold Shares (GLD) : seeks to reflect the performance of the price of gold bullion, less the expenses of the Trust’s operations. The Trust holds gold bars and from time to time, issues Baskets in exchange for deposits of gold and distributes gold in connection with redemptions of Baskets. The investment objective of the Trust is for the Shares to reflect the performance of the price of gold bullion, less the Trust’s expenses.
iShares 20+ Year Treasury Bond ETF (TLT) : TLT seeks to track the investment results of the ICE U.S. Treasury 20+ Year Bond Index (the “underlying index”). The underlying index measures the performance of public obligations of the U.S. Treasury that have a remaining maturity greater than or equal to twenty years.
Vanguard Total Bond Market Index Fund ETF Shares (BND) : seeks the performance of Bloomberg Barclays U.S. Aggregate Float Adjusted Index. Bloomberg Barclays U.S. Aggregate Float Adjusted Index represents a wide spectrum of public, investment-grade, taxable, fixed income securities in the United States-including government, corporate, and international dollar-denominated bonds, as well as mortgage-backed and asset-backed securities-all with maturities of more than 1 year.
iShares Silver Trust (SLV) : seeks to reflect generally the performance of the price of silver. The Trust seeks to reflect such performance before payment of the Trust’s expenses and liabilities. It is not actively managed. The Trust does not engage in any activities designed to obtain a profit from, or to ameliorate losses caused by, changes in the price of silver.
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