|Bid||52.71 x 1300|
|Ask||53.16 x 3200|
|Day's Range||52.79 - 53.69|
|52 Week Range||49.71 - 57.67|
|PE Ratio (TTM)||N/A|
|Beta (3Y Monthly)||0.67|
|Expense Ratio (net)||0.15%|
As market volatility spiked, investors who continued to view U.S. stock markets in a favorable light looked to a low-volatility exchange traded fund strategy to diminish further risks ahead and still keep ...
Volatility is back, and that has investors on the defensive. Huge market swings over prolonged periods of time can be a nightmare, prompting investors to make rash decisions that ultimately hamper their portfolios. And that's precisely what low-volatility exchange-traded funds (ETFs) are built to battle. Emotions can be an investor's worst enemy: Big declines trigger fear. No one wants to lose money, and they certainly don't want to lose more money. The problem? Some stocks sell off on their own merits, while others merely get temporarily caught up in the current, only to return to proper valuations once volatility has subsided. But anyone who bailed on the way down cemented their losses while leaving themselves out of the recovery. These seven low-volatility ETFs help fight this instinct. Low-vol funds use different strategies to create portfolios that should be more stabile than the broader market. Not only can that help minimize losses during downturns, but the lack of volatility can help calm investors and prevent them from making rash exits from the market. Take a look. SEE ALSO: The 27 Best Mutual Funds in 401(k) Retirement Plans
Rising equity market volatility is renewing the allure of low volatility strategies and defensive sectors, such as consumer staples and healthcare. The iShares MSCI USA Minimum Volatility ETF (Cboe: USMV), ...
IShares Edge MSCI Min Vol EAFE ETF EFAV is a compelling, low-cost exchange-traded fund that captures these traits and takes additional measures to promote diversification and limit turnover. The fund tracks the MSCI EAFE Minimum Volatility Index. Its construction process starts with all stocks in the MSCI EAFE Index, and it uses an optimizer to select and weight stocks in a way that minimizes the portfolio's expected volatility while honoring several constraints.
One critique of defensive-equity (low-volatility) strategies is that they're repackaged versions of two known investment styles: value and profitability. Low-volatility strategies have had significant but inconsistent exposure to both value and profitability.
Hopes of trade talks between the United States and China seem to be waning as Trump intends to go ahead with its planned tariffs of about $200 billion on Chinese imports.
Among smart beta exchange traded funds dedicated to individual investment factors, low volatility products have been popular with conservative investors based on the premise that emphasizing a low volatility strategy can help reduce a portfolio’s downside potential. The iShares MSCI USA Minimum Volatility ETF (Cboe: USMV) , the largest US-listed low volatility ETF, looms large in the low volatility ETF conversation. The $15.36 billion USMV is almost seven years old and tracks the MSCI USA Minimum Volatility (USD) Index.
If you've bitten off more risk than you can chew, a more conservative asset allocation or defensive equity fund can help. Defensive equity funds still carry equity risk, but they should hold up better than the market during downturns. Among these, iShares Edge MSCI Minimum Volatility USA ETF USMV is one of the best.
Renewed trade clash between the United States and China has prompt investors to re-access their portfolio, leading to higher demand for lower-risk securities.
Trade war fears have once again flared up with China threatening to impose tariff on $60 billion worth of American goods if the United States places more tariffs on Chinese imports. The list includes new 5,207 products including aircraft, soya bean oil, smoked beef, coffee and flour imported from the United States, with charges ranging from 5-25%.Source: ©iStock.com/MarcoCoda
An escalation in trade clash between the United States and China led to risk off trade, leading to higher demand for safe haven avenues or lower risk securities.
A version of this article was published in the May 2018 issue of Morningstar ETFInvestor. Download a complimentary copy of Morningstar ETFInvestor by visiting the website. Well-constructed low-volatility stock funds should offer better downside protection, a smoother ride, and better risk-adjusted performance than the market over the long term.
The economy and markets are still on a bullish path but the road may be bumpy in the near-term. Consequently, ETF investors will have to take a more targeted approach to navigate the path ahead. “We see ...
Retirement planning is never easy, but some mutual funds, index funds and exchange-traded funds (ETFs) can ease that burden. A well-balanced retirement portfolio should include stocks and bonds and perhaps other assets depending on investors’ individual risk tolerance. In retirement, investors still have several factors to consider, including risk.