Investors do not need to feel constrained by establishing an appropriate asset allocation strategy and staying invested in the markets. While the ongoing volatility can unnerve markets, pushing some to abandon their current allocation plans and delay their long-term goals, investors can turn to a minimum strategy as part of a core equity investment to help maintain market exposure and manage risks.
In the upcoming webcast, Factor Investing – iShares Factor Strategies For The Core Of Your Portfolio, Robert Hum, director and U.S. head of iShares Factors ETFs at BlackRock; and Anil Rao, executive director, Equity Applied Research at MSCI, will highlight the potential benefits of a minimum volatility strategy in an uneven market environment to help financial professionals manage their core investment client portfolios in troubled times.
For example, the iShares Edge MSCI Minimum Volatility USA ETF (USMV) is one way to position defensively. The fund seeks the investment results of the MSCI USA Minimum Volatility (USD) Index, which measures the performance of large- and mid-capitalization equity securities listed on stock exchanges in the U.S. that, in the aggregate, have lower volatility relative to the broader U.S. equity market.
For developed overseas market exposure, investors can consider the iShares Edge MSCI Min Vol EAFE ETF (BATS: EFAV). EFAV seeks the investment results of the MSCI EAFE Minimum Volatility (USD) Index composed of developed market equities that, in the aggregate, have lower volatility characteristics relative to the broader developed equity markets, excluding the U.S. and Canada. The index measures the performance of international equity securities that in the aggregate have lower volatility relative to the MSCI EAFE Index.
Additionally, investors can follow the min vol strategy across the developing markets through something like the iShares Edge MSCI Min Vol Emerging Markets ETF (BATS: EEMV). EEMV seeks to track the investment results of the MSCI Emerging Markets Minimum Volatility (USD) Index. The index measures the performance of equity securities in global emerging markets that, in the aggregate, have lower volatility relative to the large- and mid-cap global emerging markets.
Financial advisors who are interested in learning more about the minimum volatility strategy can register for the Friday, September 9 webcast here.