In a tumultuous year for equities in 2015, low volatility exchange-traded funds did their job— that job being performing admirably during challenging market environments.
For example, the PowerShares S&P 500 Low Volatility Portfolio (PowerShares Exchange-Traded Fund Trust II (NYSE: SPLV)), one of the largest U.S. low volatility ETFs, gained 4 percent last year, nearly triple the returns offered by the S&P 500.
SPLV has rivals and mid- and small-cap equivalents hailing from the same fund family, but for the purposes of this piece, SPLV will be the focus.
Turn The Spotlight On SPLV
As has been noted in the years since SPLV came to market (the ETF turns five in May), a frequent criticism of low volatility ETFs is that these funds are often highly concentrated in just a small number of sectors. When it first came to market, SPLV dealt with the criticism that it was a utilities ETF in disguise. However, two things are worth noting.
/www.benzinga.com/trading-ideas/long-ideas/16/01/6126497/for-this-low-vol-etf-its-not-all-about-sector-selection alt=For This Low Vol ETF, It's Not All About Sector Selection>Full story available on Benzinga.com
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