Did Low Volatility ETFs Deliver in 2018?

Market volatility spiked in 2018 by an average of 50% compared with 2017. Did low volatility ETFs earn their keep for investors?

Helaine Kang 15 February, 2019 | 8:17AM
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2018 was tough for investors thanks to broad declines in stock prices and increased volatility. The S&P 500 Net Return Index closed the year with a loss of 4.9% after a seemingly continued bull trend peaked out with a gain of over 10% at one point during the year.

The market volatility, as measured by the CBOE Market Volatility Index VIX, spiked in 2018 by an average of 50% compared with 2017 after two years of decline. In this turbulent market environment, risk-reducing strategies such as low/minimum-volatility ETFs have fared well in terms of both performance and raising assets.

In 2018, risk-oriented ETFs garnered closed to $65 billion globally despite flattish or slightly negative growth for the global ETF market.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Amundi IS MSCI USA Min Vol Fac ETF83.58 USD0.70Rating
iShares Edge S&P 500 Min Vol ETF USD Acc79.59 USD0.31Rating
SPDR® S&P 500 Low Volatility ETF68.15 USD1.33Rating
Xtrackers MSCI Wld Minimum Vol ETF 1C GBP2,973.54 GBP0.66Rating

About Author

Helaine Kang  is a Passive Strategies Analyst, Morningstar Europe