Investors still like low volatility exchange traded funds. Combine inflows of about $1.52 billion this year to the iShares MSCI USA Minimum Volatility ETF (NYSEArca: USMV) and the PowerShares S&P 500 Low Volatility Portfolio (NYSEArca: SPLV) say as much.
It is also hard to quibble with the returns. SPLV and USMV are up an average of almost 22% this year and while that lags the S&P 500, those performances still are not too shabby when considering SPLV and USMV are chock full of low beta stocks. [Loving Low Volatility]
As U.S. stocks have kept rising, however, high beta names have soared as low beta fare have been laggards and although the trend seemed to take a rest last month, it has recently resumed, reports Brendan Conway for Barron’s.
Although some low beta sectors have thrived this year, continually rising U.S. stocks have provided a risk on environment that buoyed the fortunes of SPLV’s high beta cousin, the PowerShares S&P 500 High Beta Portolio (NYSEArca: SPHB).
Not only has SPHB surged 34.3% this year, it has taken in almost $336.4 million, or 61%, of its $549.3 million in assets under management, since the start of 2013. SPHB invests in the 100 S&P 500 with highest betas on a 12-month trailing basis. Just over 41% of the ETF’s combined weight is allocated to financial services and consumer discretionary names. [High Beta and Low Volatility ETFs]
When it comes ex-U.S. developed market stocks, the PowerShares S&P International Developed High Beta Portfolio (NYSEArca: IDHB) and the PowerShares S&P International Developed Low Volatility Portfolio (NYSEArca: IDLV), which are spins on the MSCI EAFE Index, have been almost even with each other with a slight nod to IDHB. IDLV has $144.2 million in assets.