In the middle of last week as the S&P 500 Index dipped below its 50 day moving average for the first time since last December, we noted heavy selling activity in a fund that is structured as a subset of the S&P 500 Index.
PowerShares S&P 500 Low Volatility Portfolio (NYSEArca: SPLV) lost about $193 million in assets as we saw approximately 5 million shares redeemed from the fund.
It appears that a large institutional holder liquidated their holding in the fund last week in a rather wholesale manner. Launching less than a year ago in May of 2011, SPLV has been tremendously successful in the marketplace, having reeled in nearly $1.5 billion in assets in a short amount of time.
The ETF follows the S&P 500 Low Volatility Index and owns one hundred equities that are members of the S&P 500 Index that have demonstrated the lowest realized volatility in the past 12 month period.
Since inception, SPLV has exhibited promising performance, rallying 6.08% versus the S&P 500 up 2.62%.
Year to date, and to be expected since SPLV will tend to “miss some of the upside but protect on the downside” due to its concentration in the lower volatility names in the S&P 500 Index, the fund has lagged the broader market, and is up 1.42% versus the S&P 500 gaining 9.26%.
PowerShares S&P 500 Low Volatility Portfolio