Hartford Funds, a unit of Hartford Financial Services Group Inc (NYSE: HIG), expanded its lineup of exchange-traded funds Thursday with the introduction of
two low volatility ETFs using multi-factor strategies.
2 New Low Volatility ETFs
The two new ETFs from Hartford funds are the Hartford Multifactor Low Volatility US Equity ETF (BATS: LVUS) and the
Hartford Multifactor Low Volatility International Equity ETF (BATS: LVIN).
“The ETFs seek to track indexes, one focused on US equities and the other on developed (ex-US) and emerging markets, that are
designed to balance risk across sectors and comprise securities primarily exhibiting low volatility characteristics while
maintaining positive exposure to other potential return-enhancing factors,” said Hartford Funds in a statement.
Low Vol. With LVUS
LVUS tracks the Hartford Multifactor Low Volatility US Equity Index, which “seeks to provide a means of improving returns
through a market cycle with up to 25 percent less volatility versus the US capitalization-weighted universe. The rules-based,
proprietary methodology employs a multi-layered risk-controlled approach that seeks to improve diversification, balance risk across
sectors by utilizing expected tail loss (ETL) estimations, and reduce volatility through security selection and portfolio
composition,” according to Hartford.
At the end of the first quarter, the index allocated nearly 35 percent of its combined weight to industrial and consumer
discretionary stocks. Healthcare and consumer staples are the next largest sector weights, combining for 19.4 percent of the index
tracked by LVUS.
International Exposure With LVIN
LVIN, Hartford's international low volatility offering, follows the Hartford Multifactor Low Volatility International Equity
Index. That index, which holds developed and emerging markets stocks, operates with a similar methodology to the benchmark tracked
by LVUS.
The top 10 country allocations in LVIN combine for almost 69 percent of the new ETF's weight with the other 29 country exposures
combining for the remainder. Japan, the U.K. and Canada combine for 35 percent of the new ETF's geographic weight.
The new ETF allocates just over 29 percent of its combined sector weight to industrial and consumer discretionary names.
Healthcare is the new ETF's third-largest sector allocation at just over 10 percent.
With the debuts of LVIN and LVUS, Hartford's ETF is now comprised of nine funds, including seven smart beta offerings.
Related Links:
An ETF To Help
Avoid Value Traps
A New ETF
Is An Active Idea For Income
© 2017 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.