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Take Shelter in Low-Volatility ETFs to Combat War & Pandemic Woes
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Market participants do not seem to be very upbeat about the current market scenario and the outlook ahead. The Russia-Ukraine war saga, high inflation levels, Federal Reserve’s aggressive stance on rate hikes and resurging COVID-19 cases in China are keeping investors on edge, adding to the market gyrations this year.
Investors willing to sail through the current market turbulences can consider iShares MSCI USA Min Vol Factor ETF (USMV - Free Report) , Invesco S&P 500 Low Volatility ETF (SPLV - Free Report) , iShares MSCI Global Min Vol Factor ETF (ACWV - Free Report) and Invesco S&P 500 High Dividend Low Volatility ETF (SPHD - Free Report) .
According to the latest updates, Russia’s atrocities on Ukrainians, labeled as “war crimes,” are being highly condemned by global leaders. After seeing the images from Bucha, northwest of Kyiv,some global leaders have proposed the idea of imposing more sanctions on Russia. The rising commodities prices due to the Russia-Ukraine war have added to the concerns.
Meanwhile, resurging COVID-19 cases in China have led to a lockdown in Shanghai, the major financial hub of the country, in accordance with China’s zero-COVID policy. The city has witnessed more than 73,000 infections over the past month. The resurging cases and lockdown measures have reinstated the fears of a pandemic-induced global economic slowdown and renewed supply-chain disturbances.
The recently released FOMC minutes of the March meeting highlighted the central bank’s plans to control the inflation levels by larger interest rate hikes. It also outlined the method and magnitude of reducing the balance sheet that is holding around $9 trillion in assets. Notably, the Federal Reserve officials have decided to shrink their balance sheet by approximately $95 billion a month.
Commenting on the current market conditions, Cliff Corso of Advisors Asset Management has stated that “What that means for the markets are continued volatility around the uncertainty to higher rates and lower-income cash flow stocks, growth type stocks probably continuing to get discounted as rates rise,” according to a CNBC article.
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 USA Min Vol Factor ETF offers exposure to 172 U.S. stocks with lower volatility characteristics than the broader U.S. equity market by tracking the MSCI USA Minimum Volatility (USD) Index. With AUM of $28.27 billion, iShares MSCI USA Min Vol Factor ETF charges 0.15% in expense ratio (read: Filling ETFs in March Madness "Sweet 16" Brackets).
Invesco S&P 500 Low Volatility ETF provides exposure to stocks with the lowest realized volatility over the past 12 months. The fund is based on the S&P 500 Low Volatility Index and holds 102 securities in its basket. Invesco S&P 500 Low Volatility ETF hasAUM of $9.65 billion and charges an expense ratio of 25 basis points (bps), as stated in the prospectus (read: 5 ETFs to Counter Imminent War-Induced Global Growth Slowdown).
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 398 securities. iShares MSCI Global Min Vol Factor ETF has AUM of $4.99 billion and charges 20 bps in annual fees.
Invesco S&P 500 High Dividend Low Volatility ETF seeks investment results that generally correspond (before fees and expenses) to the price and yield of the S&P 500 Low Volatility High Dividend Index. It holds 51 securities. Invesco S&P 500 High Dividend Low Volatility ETF has AUM of $3.46 billion and charges 30 bps in annual fees (read: Tap on These 5 ETFs as Recession Fears Grip Wall Street).
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Take Shelter in Low-Volatility ETFs to Combat War & Pandemic Woes
Market participants do not seem to be very upbeat about the current market scenario and the outlook ahead. The Russia-Ukraine war saga, high inflation levels, Federal Reserve’s aggressive stance on rate hikes and resurging COVID-19 cases in China are keeping investors on edge, adding to the market gyrations this year.
Investors willing to sail through the current market turbulences can consider iShares MSCI USA Min Vol Factor ETF (USMV - Free Report) , Invesco S&P 500 Low Volatility ETF (SPLV - Free Report) , iShares MSCI Global Min Vol Factor ETF (ACWV - Free Report) and Invesco S&P 500 High Dividend Low Volatility ETF (SPHD - Free Report) .
According to the latest updates, Russia’s atrocities on Ukrainians, labeled as “war crimes,” are being highly condemned by global leaders. After seeing the images from Bucha, northwest of Kyiv,some global leaders have proposed the idea of imposing more sanctions on Russia. The rising commodities prices due to the Russia-Ukraine war have added to the concerns.
Meanwhile, resurging COVID-19 cases in China have led to a lockdown in Shanghai, the major financial hub of the country, in accordance with China’s zero-COVID policy. The city has witnessed more than 73,000 infections over the past month. The resurging cases and lockdown measures have reinstated the fears of a pandemic-induced global economic slowdown and renewed supply-chain disturbances.
The recently released FOMC minutes of the March meeting highlighted the central bank’s plans to control the inflation levels by larger interest rate hikes. It also outlined the method and magnitude of reducing the balance sheet that is holding around $9 trillion in assets. Notably, the Federal Reserve officials have decided to shrink their balance sheet by approximately $95 billion a month.
Commenting on the current market conditions, Cliff Corso of Advisors Asset Management has stated that “What that means for the markets are continued volatility around the uncertainty to higher rates and lower-income cash flow stocks, growth type stocks probably continuing to get discounted as rates rise,” according to a CNBC article.
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 USA Min Vol Factor ETF (USMV - Free Report)
iShares MSCI USA Min Vol Factor ETF offers exposure to 172 U.S. stocks with lower volatility characteristics than the broader U.S. equity market by tracking the MSCI USA Minimum Volatility (USD) Index. With AUM of $28.27 billion, iShares MSCI USA Min Vol Factor ETF charges 0.15% in expense ratio (read: Filling ETFs in March Madness "Sweet 16" Brackets).
Invesco S&P 500 Low Volatility ETF (SPLV - Free Report)
Invesco S&P 500 Low Volatility ETF provides exposure to stocks with the lowest realized volatility over the past 12 months. The fund is based on the S&P 500 Low Volatility Index and holds 102 securities in its basket. Invesco S&P 500 Low Volatility ETF hasAUM of $9.65 billion and charges an expense ratio of 25 basis points (bps), as stated in the prospectus (read: 5 ETFs to Counter Imminent War-Induced Global Growth Slowdown).
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 398 securities. iShares MSCI Global Min Vol Factor ETF has AUM of $4.99 billion and charges 20 bps in annual fees.
Invesco S&P 500 High Dividend Low Volatility ETF (SPHD - Free Report)
Invesco S&P 500 High Dividend Low Volatility ETF seeks investment results that generally correspond (before fees and expenses) to the price and yield of the S&P 500 Low Volatility High Dividend Index. It holds 51 securities. Invesco S&P 500 High Dividend Low Volatility ETF has AUM of $3.46 billion and charges 30 bps in annual fees (read: Tap on These 5 ETFs as Recession Fears Grip Wall Street).