Low-Vol ETF Strategies Appeal Amidst Political Induced Volatility


MSCI, though, pointed out that the min-vol index is within one standard deviation of its historic premium to the market, so the strategy is not too overvalued, yet.

Consequently, the chances of the strategy falling off ahead is more likely. Nevertheless, there is a chance of a more serious market plunge, which could cause the min-vol strategy to shoot up, with valuations growing to a much higher premium.

Related: A Defensive Sector ETF for Volatile Summer Months

Supporting the low-vol performance, MSCI pointed to beta, the degree to which stocks tend to move in the same direction as the market, along with dividend yields. Low-vol ETFs have been strengthening this year as they limited downside risk when the markets slipped and strengthened on increased defensive bets during turbulent times.

For more information on the low-vol strategy, visit our low-volatility category.