For ETF investors, low-volatility strategies could produce better risk-adjusted returns, or help diminish drawdowns during times of heightened market selling while allowing an investor to participate in some equity market upside.
EFAV holds nearly 230 stocks and features exposure to about 15 countries. Japan, the United Kingdom and Switzerland are the ETF’s largest country weights, combining for over 57% of the fund’s weight. Over half of EFAV’s country weights are European nations.
Other ex-US low volatility ETFs include the iShares MSCI All Country World Minimum Volatility ETF (NYSEArca: ACWV) employs the MSCI minimum volatility selection process on the benchmark All Country World Index. Additionally, investors can target emerging market exposure through the iShares MSCI Emerging Markets Minimum Volatility ETF (NYSEArca: EEMV), a low-vol variant on the widely observed MSCI Emerging Market Index.
EFAV allocates about a third of its combined weight to consumer staples and healthcare stocks while financial services and industrial names combine for 30% of the fund’s weight.
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