For low-vol international stocks, investors can take a look at iShares MSCI All Country World Minimum Volatility (NYSEArca: ACWV). [Global Low-Volatility ETF For Downside Protection]
“During this spring’s sell off, the low-volatility ETF lost less than half as much as the ETF that tracks the overall MSCI All Country World index,” Fried said. “Clearly, the low-volatility approach has delivered in down markets, as you’d expect. But in up markets … a low-volatility portfolio isn’t going to be the pacesetter.”
The editor also notes that strong tilts to value stocks over growth in low-vol ETFs lead to “some funky sector weightings” and that the funds “shouldn’t take over your portfolio.”
As of June 19, SPLV had 28.9% in consumer staples and 31.7% in the utilities sector, according to manager Invesco PowerShares. SPDR S&P 500 ETF (NYSEArca: SPY) has 11.2% in consumer staples and only 3.7% in utilities. [Utilities ETFs Outperforming on Stability, Dividends]
The chart below shows the relative performance of the low-volatility fund, SPLV, versus the S&P 500 ETF, SPY.
