ETFs in the latter category include PowerShares S&P 500 Low Volatility Portfolio (NYSEArca: SPLV) and iShares MSCI Emerging Markets Minimum Volatility Index (NYSEArca: EEMV). [Low-Volatility ETFs for Emerging Markets]
SPLV is the largest low-volatility ETF by assets with about $3.7 billion. The tracking index consists of the 100 stocks from the S&P 500 with the lowest realized volatility over the past 12 months. Volatility measures the tendency of a security to fluctuate in price.
Two new ETFs, PowerShares S&P MidCap Low Volatility (NYSEArca: XMLV) and PowerShares S&P SmallCap Low Volatility Portfolio (NYSEArca: XSLV), began trading last week. [PowerShares to List Small- and Mid-Cap Low-Volatility ETFs]
“In several conversations with ETF sponsors over the last year about Min Vol products, it has become clear … that the industry views these products as highly relevant for both retail and institutional investors,” the ConvergEx analysts said. “They are essentially a cross-over offering, with appeal for equity-heavy portfolios anxious to reduce risk in the fourth year of a rally as well as bond investors who need to add equity exposure.”