In an age of extreme uncertainty on the stock market, low-volatility ETFs are becoming increasingly popular.
So says Barron’s writer Brendan Conway in a recent article called “Crowds Clamor for Calm.” Conway argues that investors are gravitating toward ETFs, or exchange-traded funds, that track the least volatile components of the stock market. That’s why more than a dozen low-volatility ETFs have debuted this year, including seven since September.
The largest of those is the PowerShares S&P 500 Low Volatility Portfolio (NYSE: SPLV), which tracks stable dividend stocks such as Southern (NYSE: SO) and Kellogg (NYSE: K). The SPLV has been a safe haven for investors amid recent turmoil In the market, remaining virtually unchanged over the past four months while the S&P 500 has plummeted 8 percent.
The Russell 1000 Low Volatility (LVOL) ETF has also provided shelter from things like the European debt crisis and the high unemployment rate in recent months.
Conway details other advantages low-risk ETFs such as the SPLV and the LVOL offer investors these days. Click here to read the full story.