|Bid||0.00 x 4000|
|Ask||0.00 x 4000|
|Day's Range||42.21 - 42.46|
|52 Week Range||36.16 - 42.54|
|PE Ratio (TTM)||N/A|
|Beta (3Y Monthly)||0.81|
|Expense Ratio (net)||0.30%|
Low volatility ETFs had a few days in the sun last year, particularly in the fourth quarter when the S&P 500 tumbled nearly 15%.The S&P 500 finished 2018 with annualized volatility of 17%, the highest reading over the past six years, according to ETF Replay data. That market turbulence prompted investors to turn to low volatility ETFs for stability and those funds obliged. The two largest U.S.-listed low volatility ETFs outperformed the S&P 500 while sporting average annualized volatility of about 13%.And that's exactly what low volatility ETFs are supposed to do: be less volatile and perform less poorly than standard equity funds when the broader market declines. Those are the expectations investors should have from low volatility ETFs. Investors expecting low volatility to offer significant out-performance when stocks are surging are likely to be disappointed.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * Buy These 5 Stocks to Play the Megatrend of the Century The thing about volatility is that it frequently catches investors off guard. In other words, it is better to be prepared than reactive when volatility spikes. Investors can do just that with these low volatility ETFs.Source: Shutterstock iShares Edge MSCI Min Vol Emerging Markets ETF (EEMV)Expense ratio: 0.25% per year, or $25 on a $10,000 investment.With the MSCI Emerging Markets Index up nearly 8% year-to-date, some investors will likely be tempted -- rightfully so -- to nibble at developing economies. Investors that want to do so in conservative fashion can do so with the iShares Edge MSCI Min Vol Emerging Markets ETF (BATS:EEMV), one of a few emerging markets low volatility ETFs.EEMV is up 5.10% year-to-date, reminding investors that international low volatility ETFs, like their domestic equivalents, can lag when the underlying market is rising. Still, EEMV has plenty of benefits for investors."True to its design, EEMV has historically provided investors with downside risk mitigation. In 2018, EEMV declined 58% less than that of broad EM as measured by the MSCI Emerging Markets Index," according to BlackRock. "If we extend the analysis to a longer period of time, similar performance behaviors hold. Since its first full month of live performance in November of 2011, EEMV has exhibited a downside capture of only 78%, reduced volatility by over 23%, and dampened the maximum drawdown by 22%."EEMV holds over 300 stocks. China and Taiwan combine for almost 40% of the fund's geographic weight.Source: Shutterstock Invesco S&P 500 High Dividend Low Volatility ETF (SPHD)Expense ratio: 0.30% per year, or $30 on a $10,000 investment.The Invesco S&P 500 High Dividend Low Volatility ETF (NYSEARCA:SPHD) is one of the best low volatility ETFs for investors looking for the benefits of reduced volatility and higher income. SPHD tracks an index comprised of the 50 S&P 500 stocks with the lowest trailing 12-month volatility and the highest dividend yields.The required combination of low volatility and high dividend yields can lead to some concentration risk at the sector level. After all, not all of the 11 sectors in the S&P 500 are considered light on volatility or high-yield plays. Not surprisingly, SPHD allocates about 49% of its weight to real estate and utilities names. Those sectors usually fit the bill as high-yield and less volatile than other sectors. * 7 Forever Stocks to Buy for Long-Term Gains For income investors, SPHD definitely makes sense as this low volatility ETF has a 12-month distribution rate of 4.06% -- almost double the S&P 500's dividend yield. SPHD has a five-star Morningstar rating.Source: Shutterstock Fidelity Low Volatility Factor ETF (FDLO)Expense ratio: 0.29% per year, or $29 on a $10,000 investment.Fidelity has an expanding lineup of cost-effective ETFs, including some factor-based strategies. The Fidelity Low Volatility Factor ETF (NYSEARCA:FDLO) is one of those funds.This low volatility ETF tracks the Fidelity U.S. Low Volatility Factor Index, "which is designed to reflect the performance of stocks of large and mid-capitalization U.S. companies with lower volatility than the broader market," according to Fidelity.Last year, FDLO beat the S&P 500 and was less volatile than the benchmark, but the Fidelity fund lagged the two largest low volatility ETFs. This year, FDLO is beating the biggest low volatility ETF. At the sector level, FDLO is unique relative to other low volatility ETFs. Technology is the largest sector weight in FDLO at 19.62% and FDLO allocates less than 7% of its combined weight to the real estate and utilities sectors.Todd Shriber owns shares of SPHD. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks That Every 20-Year-Old Should Buy * 10 Best Dividend Stocks to Buy for the Next 10 Months * 10 Monster Growth Stocks to Buy for 2019 and Beyond Compare Brokers The post 3 Low Volatility ETFs for Smooth Sailing in 2019 appeared first on InvestorPlace.
Dividend stocks can be less volatile than their non-dividend counterparts. Some exchange traded funds ratchet up that concept by focusing on dividend stocks with favorable volatility characteristics. SPHD “is composed of 50 securities traded on the S&P 500 Index that historically have provided high dividend yields and low volatility,” according to Invesco.
On November 13, Cummins (CMI) said that it would support the EPA’s intended new standards on the low nitrogen oxides rule for heavy-duty engines like trucks on highways. The EPA is expected to release the new norms in 2020. The efforts are meant to reduce the nitrogen oxide and particulate matters.
After a wild October, one that saw the S&P 500 notch one of its worst October performances ever, equity market volatility remains a concern for investors. Stocks rallied following the midterm elections, but the S&P 500 quickly gave back those gains and is currently saddled with a month-to-date loss, suggesting some of that October volatility is seeping into November.
Among exchange-traded funds (ETFs), departures have recently been widespread with investors yanking money from a variety of equity and fixed income funds. Low volatility ETFs can help investors stay engaged with stocks during tumultuous times. A perk of low volatility ETFs is that these funds are designed to endure lower drawdowns when stocks decline, but the rub is that they do not capture all the upside delivered in strong trending bull markets.
As is the case with life in general, investing life moves in cycles. Younger investors enjoy at least two valuable luxuries: time and the ability to take on more risk with retirement funds than their older counterparts. Investors nearing retirement face entirely different circumstances than those youngsters that are new to the workforce.
Investing for retirement usually means investing for the long term. While long-term investing should include individual stocks, low-cost exchange-traded funds (ETFs) and index funds should also be part of the equation.
Various historical data points and research confirm that dividend-paying stocks are usually less volatile than their non-dividend counterparts. Additionally, stocks that are less volatile, over the long-term, typically outperform rivals that experience larger drawdowns or have higher standard deviations.
A version of this article was published in the March 2018 issue of Morningstar ETFInvestor. In this article, I'll zero in on an often overlooked source of tax costs and examine the topic of qualified dividend income, or QDI. The Jobs and Growth Tax Relief Reconciliation Act of 2003 made dividend payments more attractive because it introduced a lower tax rate for qualified dividend payments.
In the world of smart beta exchange traded funds, low volatility and dividends are two of the most popular concepts. Some funds marry dividend and low volatility themes, whether by intent or indirectly. ...