The Pavilion strategists, though, discovered that low-volatility ETF strategies beat the S&P 500 with reduced risk over the long-term.
Low-volatility ETFs, like the iShares MSCI USA Minimum Volatility ETF (NYSEArca: USMV) and PowerShares S&P 500 Low Volatility Portfolio (NYSEArca: SPLV), have attracted billions. However, the strategy has trailed the S&P 500 this year as equities rallied. USMV is up 23% year-to-date and SPLV is up 21%. [Don’t Forget This Low Volatility ETF]
For more information on smart-beta indices, visit our indexing category.
Max Chen contributed to this article.