ETF Chart of the Day: Global Low-Volatility Fund
March 30th, 2012 at 10:51am by Paul Weisbruch, Street One Financial
A relatively new fund to the ETF landscape that has suddenly become rather active is iShares MSCI All Country World Minimum Volatility (NYSEArca: ACWV).
Debuting in late last October of 2011, ACWV has literally had more than a dozen “zero volume” days over the course of its brief trading history, but trading volume has picked up considerably this week.
Averaging just 3100 shares per day, the fund has registered several days of 10,000 plus shares traded, and based on inflows data, it is clear that institutional accumulation is occurring, as we have seen more than $50 million flow into the ETF. [Four New Low-Volatility ETFs]
ACWV’s objective is to invest in large and mid-cap stocks within a universe of 45 developed and emerging market countries. ACWV is related to another BlackRock product, iShares MSCI ACWI Ex-U.S. (NYSEArca: ACWX) which has been on the market for 4 years and has attracted nearly $1 billion in assets under management.
The difference, is that the methodology that ACWV is based upon focuses on specific equities that have demonstrated lower beta and volatility levels than others within the ACWI index, and thus isolates these specific names.
The result, ideally, is a subset of the ACWI index that would deliver lower beta and overall volatility while still granting exposure to an ACWI “like” index. Currently, top holdings of ACWV are ENB (1.54%), TRP (1.52%), MCD (1.50%), ADP (1.50%), and NTT DoCoMo (1.34%).
Since the inception of ACWV last October, it is up 4.51% versus ACWX which has rallied 8.30%, but given the overall path of the equity markets during this timeframe, this is quite expected, as investors that will likely be attracted to the product are probably willing to forgo some upside performance as a trade-off for a lower overall beta to their benchmark and a less volatile path of returns over time.
iShares MSCI All Country World Minimum Volatility