Alternatively, investors can also take a look at the iShares MSCI USA Minimum Volatility ETF (NYSEArca: USMV) for stocks that exhibit low volatility. USMV evaluates the volatility of each individual stock and the correlations between stocks. The fund applies a number of constraints to ensure the portfolio is sufficiently diversified.
Investors can also take the low-volatility approach to international equity exposure. For instance, the iShares MSCI Emerging Markets Minimum Volatility ETF (NYSEArca: EEMV) and PowerShares S&P Emerging Markets Low Volatility Portfolio (NYSEArca: EELV) can provide a more conservative alternative to market capitalization-weighted emerging market ETFs. [A Defensive ETF Approach to Emerging Markets]
Furthermore, the PowerShares S&P International Developed Low Volatility Portfolio (NYSEArca: IDLV) and iShares MSCI EAFE Minimum Volatility ETF (NYSEArca: EFAV) provide a low-volatile option for developed markets. [Damping Volatility With International ETFs]
For more information on low-vol strategies, visit our low-volatility category.
Max Chen contributed to this article.