CHICAGO, April 17, 2012 /PRNewswire/ -- Stocks and funds in this article include: PowerShares S&P 500 Low Volatility Portfolio (SPLV), Russell 2000 Low Volatility ETF (SLVY), Russell 1000 Low Volatility ETF (LVOL). Eric Dutram looks at six easy ways investors can reduce the volatility in their portfolios while still being exposed to broad markets.
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Six Easy Ways To Target Low Volatility Stocks With ETFs written by Eric Dutram of Zacks Investment Research:
Although broad stock markets have performed well to start the year, a number of huge risks remain to further growth. European woes, light job growth, and emerging market inflation are all concerns that do not appear to be going away anytime soon, and have rattled markets as of late.
However, there is currently a lack of quality alternatives to the equity market, thanks to anemic bond yields which are forcing many investors to reconsider their fixed income allocations. Furthermore, if stocks begin to trend lower, a stronger dollar will likely be a result, a factor that could crush commodity prices in the near term (see more in the Zacks ETF Center).
Yet thanks to the issues outlined above, stocks could see extreme levels of volatility, especially in the short term. In fact, investors have already begun to see some of this price movement as the S&P 500 has lost nearly fifty points so far in the month of April.
Due to this shakiness, it may be time for risk adverse investors to take a closer look at low volatility ETF options instead. These securities focus on equities that have lower standard deviation levels than many of their counterparts, making them interesting picks for skittish investors who want to maintain lower risk equity exposure (see Three ETFs For An Iranian Crisis).
Luckily for these investors, there are a number of choices in the space, targeting various levels of the U.S. market and the international space allowing anyone to focus in on low volatility stocks in all of the most important areas of the economy. Below, we profile six choices investors have in the low volatility space, highlighting some of the key differences between each of these interesting funds:
For the rest of this ETF article, please visit Zacks.com at: http://www.zacks.com/stock/news/73064/six-easy-ways-to-target-low-volatility-stocks-with-etfs
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
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Contact: Eric Dutram
Company: Zacks.com
Phone: 312-265-9462
Email: [email protected]
Visit: www.Zacks.com
SOURCE Zacks Investment Research, Inc.
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