Obviously, these strategies are not perfect downside hedges. Over the long term, however, both the S&P 500 Dividend Aristocrats and the S&P 500 Low Volatility Index have tended to offer patient investors protection from declining markets, while providing some exposure to the upside. Though both of these indices tend to underperform the S&P 500 during bull runs, they provide some shelter when the sky starts to fall.
This article was written by Chris Bennett, senior analyst, index investment strategy, S&P Dow Jones Indices.
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