Citing BlackRock data, S&P says in the first two months of 2013, the 34 low-volatility exchange traded products gathered on average $926 million in new assets each month, more than double what was added to them a year earlier.
State Street (NYSE: STT) recently launched its first low-volatility ETFs: SPDR Russell 2000 Low Volatility ETF (NYSEArca: SMLV) and SPDR Russell 1000 Low Volatility ETF (NYSEArca: LGLV). [A Look at Two New Low-Volatility ETFs]
S&P notes that low-volatility ETFs can vary in their portfolio construction, so investors should do some research before choosing a fund.
“We think investors wanting to stay invested in the market but protect some of their downside should look at one of these low volatility products as the benchmarks they seek to replicate have strong records in flat and down markets, while only lagging somewhat in recent up markets,” said Todd Rosenbluth, S&P Capital IQ Director of ETF Research.
For the trailing 12 months, SPLV is up 17.6% compared with a total return of 13.1% for the S&P 500, according to Morningstar.
PowerShares S&P 500 Low Volatility Portfolio