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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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Amundi IS MSCI USA Min Vol Fac ETF82.52 USD-0.24Rating
iShares Edge S&P 500 Min Vol ETF USD Acc77.41 USD-0.14Rating
SPDR® S&P 500 Low Volatility ETF66.78 USD0.19Rating
Xtrackers MSCI Wld Minimum Vol ETF 1C GBP2,862.50 GBX-0.14Rating

About Author

Helaine Kang  is a Passive Strategies Analyst, Morningstar Europe

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