SPLV holds the 100 S&P 500 stocks that are ranked as least volatile on a trailing 12-month basis, but that does not mean the ETF is permanently wed to the utilities sector. If utilities volatility spiked and/or volatility dramatically declined in another sector, SPLV’s utilities exposure would be drop. [Low Volatility ETFs Make a Comeback]
SPLV has also benefited from the return to value sectors, including industrials, which represent 16.4% of the ETF’s weight. SPLV has a trailing 12-month yield of 2.4% and pays a monthly dividend.
Newfound is also bullish on the new, actively managed PowerShares Multi-Strategy Alternative Portfolio (NasdaqGM: LALT).
LALT tracks a proprietary benchmark developed by Morgan Stanley (NYSE: MS) that is comprised of quantitative, rules-based strategies. The benchmark seeks to capture non-tradition risk premia across multiple asset classes, including equities, bonds, currencies and volatility instruments. [New Liquid Alts Idea]
“In the nontraditional income space, we see broad momentum tailwinds across all asset classes, but our income models tilt towards the bank loan, high-yield, preferred equities and mortgage REITs on a risk-adjusted yield basis,” Newfound Research Vice President Andrew Gogerty said in an interview with Investor’s Business Daily.
PowerShares S&P 500 Low Volatility Portfolio
Tom Lydon’s clients own shares of HYG.