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Global Low-Volatility ETFs to Tap Amid Rising COVID & War Woes
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The global market scenario looks dull as market participants are increasingly worried about slowing economic growth. The dual blows of the Russia-Ukraine war crisis and the resurging COVID-19 cases in China that have led to lockdown in its financial hub Shanghai are keeping investors on edge.
The International Monetary Fund’s (IMF) latest report on the world economic outlook in April 2022 also projects slowing economic growth. It projects global growth at 3.6% for 2022 and 2023, comparing unfavorably with about 6.1% in 2021. The figure falls short of January’s estimated figures by 0.8% and 0.2%, respectively, for 2022 and 2023. Moreover, rallying commodity prices due to the ongoing war crisis have added to inflation projections. The IMF predicts inflation levels of 5.7% in advanced economies and 8.7% in emerging market and developing economies. The figures are 1.8% and 2.8% above the projections issued last January.
Coming to the ongoing Russia-Ukraine war, Gazprom is halting gas supplies to Poland and Bulgaria as they have denied paying for the gas in rubles, not meeting Moscow’s latest demands (per a CNBC article). This is leading to a surge in European gas prices, pulling the euro lower. The move has come at a time when tensions between Russia and the Western allies are at a high because of the ongoing war.
Investors are also on edge as the threat of a nuclear attack seems real. Kremlin has itself been stressing on the significant risk posing the usage of the highly fatal nuclear weapons in the attack. The U.S. Defense Secretary Lloyd Austin has retaliated to the nuclear war threats by stating it to be “very dangerous and unhelpful,” according to a CNBC article.
Moreover, resurging COVID-19 cases in China have led to a lockdown in Shanghai, in keeping with China’s zero-COVID policy. The city has witnessed more than 500,000 infections since the beginning of March 2022 (per a CNN article). The resurging cases and lockdown measures have reinstated fears of a pandemic-induced global economic slowdown and renewed supply-chain disturbances.
The outbreak in Beijing made the situation worse, where mass COVID-19 testing has begun for nearly 20 million residents, according to a CNN article. Commenting on the current conditions, Xu Hejian, a spokesperson for the Beijing municipal government, has mentioned that "The outbreak in Beijing is coming fast and furious," as stated in a CNN report.
Global Low-Volatility ETFs to the Rescue
Low-volatility products could be intriguing choices for those who want to continue investing in equities in turbulent market conditions. Consider the following exciting options:
iShares MSCI Global Min Vol Factor ETF provides exposure to global stocks with potentially less risk. ACWV tracks the MSCI All Country World Minimum Volatility Index and holds 401 securities. iShares MSCI Global Min Vol Factor ETF has AUM of $4.85 billion and charges 20 basis points (bps) in annual fees (read: Bet on These ETFs as Fed Might Turn Super Hawkish in 2022).
Invesco S&P Emerging Markets Low Volatility ETF is based on the S&P BMI Emerging Markets Low Volatility Index and holds 219 securities. Invesco S&P Emerging Markets Low Volatility ETF has AUM of $935.8 million and charges 29 bps in annual fees.
Invesco S&P International Developed Low Volatility ETF (IDLV - Free Report)
The Invesco S&P International Developed Low Volatility ETF is based on the S&P BMI International Developed Low Volatility Index and holds 214 securities. The fund has AUM of $590.1 million and charges 25 bps in annual fees.
Legg Mason International Low Volatility High Dividend ETF (LVHI - Free Report)
The Legg Mason International Low Volatility High Dividend ETF seeks to track the investment results of an underlying index composed of equity securities of developed markets outside the United States with relatively high yield and low price and earnings volatility and holds 99 securities. The fund has AUM of $103.3 million and charges 40 bps in annual fees (read: 8 Foreign Dividend ETFs That Have Trumped S&P 500 YTD).
The iShares MSCI EAFE Min Vol Factor ETF seeks to track the investment results of an index composed of developed market equities that, in the aggregate, have lower volatility characteristics relative to the broader developed equity markets, excluding the United States and Canada. It holds 251 securities. The fund has AUM of $6.72 billion and charges 20 bps in annual fees.
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Global Low-Volatility ETFs to Tap Amid Rising COVID & War Woes
The global market scenario looks dull as market participants are increasingly worried about slowing economic growth. The dual blows of the Russia-Ukraine war crisis and the resurging COVID-19 cases in China that have led to lockdown in its financial hub Shanghai are keeping investors on edge.
The International Monetary Fund’s (IMF) latest report on the world economic outlook in April 2022 also projects slowing economic growth. It projects global growth at 3.6% for 2022 and 2023, comparing unfavorably with about 6.1% in 2021. The figure falls short of January’s estimated figures by 0.8% and 0.2%, respectively, for 2022 and 2023. Moreover, rallying commodity prices due to the ongoing war crisis have added to inflation projections. The IMF predicts inflation levels of 5.7% in advanced economies and 8.7% in emerging market and developing economies. The figures are 1.8% and 2.8% above the projections issued last January.
Coming to the ongoing Russia-Ukraine war, Gazprom is halting gas supplies to Poland and Bulgaria as they have denied paying for the gas in rubles, not meeting Moscow’s latest demands (per a CNBC article). This is leading to a surge in European gas prices, pulling the euro lower. The move has come at a time when tensions between Russia and the Western allies are at a high because of the ongoing war.
Investors are also on edge as the threat of a nuclear attack seems real. Kremlin has itself been stressing on the significant risk posing the usage of the highly fatal nuclear weapons in the attack. The U.S. Defense Secretary Lloyd Austin has retaliated to the nuclear war threats by stating it to be “very dangerous and unhelpful,” according to a CNBC article.
Moreover, resurging COVID-19 cases in China have led to a lockdown in Shanghai, in keeping with China’s zero-COVID policy. The city has witnessed more than 500,000 infections since the beginning of March 2022 (per a CNN article). The resurging cases and lockdown measures have reinstated fears of a pandemic-induced global economic slowdown and renewed supply-chain disturbances.
The outbreak in Beijing made the situation worse, where mass COVID-19 testing has begun for nearly 20 million residents, according to a CNN article. Commenting on the current conditions, Xu Hejian, a spokesperson for the Beijing municipal government, has mentioned that "The outbreak in Beijing is coming fast and furious," as stated in a CNN report.
Global Low-Volatility ETFs to the Rescue
Low-volatility products could be intriguing choices for those who want to continue investing in equities in turbulent market conditions. Consider the following exciting options:
iShares MSCI Global Min Vol Factor ETF (ACWV - Free Report)
iShares MSCI Global Min Vol Factor ETF provides exposure to global stocks with potentially less risk. ACWV tracks the MSCI All Country World Minimum Volatility Index and holds 401 securities. iShares MSCI Global Min Vol Factor ETF has AUM of $4.85 billion and charges 20 basis points (bps) in annual fees (read: Bet on These ETFs as Fed Might Turn Super Hawkish in 2022).
Invesco S&P Emerging Markets Low Volatility ETF (EELV - Free Report)
Invesco S&P Emerging Markets Low Volatility ETF is based on the S&P BMI Emerging Markets Low Volatility Index and holds 219 securities. Invesco S&P Emerging Markets Low Volatility ETF has AUM of $935.8 million and charges 29 bps in annual fees.
Invesco S&P International Developed Low Volatility ETF (IDLV - Free Report)
The Invesco S&P International Developed Low Volatility ETF is based on the S&P BMI International Developed Low Volatility Index and holds 214 securities. The fund has AUM of $590.1 million and charges 25 bps in annual fees.
Legg Mason International Low Volatility High Dividend ETF (LVHI - Free Report)
The Legg Mason International Low Volatility High Dividend ETF seeks to track the investment results of an underlying index composed of equity securities of developed markets outside the United States with relatively high yield and low price and earnings volatility and holds 99 securities. The fund has AUM of $103.3 million and charges 40 bps in annual fees (read: 8 Foreign Dividend ETFs That Have Trumped S&P 500 YTD).
iShares MSCI EAFE Min Vol Factor ETF (EFAV - Free Report)
The iShares MSCI EAFE Min Vol Factor ETF seeks to track the investment results of an index composed of developed market equities that, in the aggregate, have lower volatility characteristics relative to the broader developed equity markets, excluding the United States and Canada. It holds 251 securities. The fund has AUM of $6.72 billion and charges 20 bps in annual fees.