Having highlighted PowerShares S&P 500 Low Volatility Portfolio (NYSEArca: SPLV) yesterday, we stay on the theme of “Low Volatility” structured ETFs since it has been an area of growth and innovation in the ETF space.
In October of 2011, iShares released USMV (iShares MSCI USA Minimum Volatility), and the fund has exposure to both large and mid-cap names in following an MSCI strategy.
Since inception, USMV has demonstrated impressive returns versus its larger peer SPLV, having rallied 10.13% versus SPLV’s gain of 7.17% during the same time period. In fact, yesterday USMV saw a nice uptick in volume as more than 165,000 shares traded versus 14,900 shares on an average daily basis.
Similarly, Russell launched LVOL (Russell 1000 Low Volatility Index) which screens specific equities from the Russell 1000 index for low volatility characteristics. The majority of funds in the “Low Vol” arena have an international slant to them, for instance iShares also released ACWV (iShares MSCI All Country World Minimum Volatility), EEMV (iShares MSCI Emerging Markets Minimum Volatility), and EFAV (iShares MSCI EAFE Minimum Volatility).
One will note that the ticker symbols are quite easy to remember for these funds, as they simply take very large and established funds, EFA and EEM, and simply add a “V.”
Russell and PowerShares also have forayed further into the “Low Vol” space by releasing EELV (PowerShares S&P Emerging Markets Low Volatility Portfolio) and IDLV (PowerShares S&P International Developed Low Volatility), SLVY (Russell 2000 Low Volatility), and XLVO (Russell Developed Ex-U.S. Low Volatility).
With zero investment options in this space available say two years ago, there are now 10 funds offered via three separate ETF issuers, as it seems there is ample investor appetite for strategies that deliver exposure to equities but not simply a market cap weighted broad based approach, but one that hones in on equities that have specific characteristics (in this case demonstrable lower beta and volatility attributes).
iShares MSCI USA Minimum Volatility
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