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Four Low-Volatility ETFs to Hedge Your Portfolio


Some allocation to low-volatility stocks and ETFs in a portfolio will be beneficial to investors.

The fund was launched in May last year and has proved to be extremely popular with the investors as it has already garnered about $2.6 billion in assets. The ETF holds 100 securities currently, mostly from the Consumer Staples (30.9%), Utilities (29.2%) and Healthcare (14.7%) sectors. The ETF has returned 11.73% year-to-date.

iShares MSCI USA Min Volatility (NYSEARCA:USMV)

USMV seeks to replicate the MSCI USA Minimum Volatility Index, which is comprised of US securities in the top 85% market cap that have lower absolute volatility. The underlying index begins with MSCI USA Index, which is a capitalization-weighted index, and then follows a rules-based methodology to determine weights for securities in the index.

The fund charges a very low expense ratio of 15 basis points annually while the 30 day SEC yield is 2.66% currently. Heath Care (17.2%), Consumer Staples (15.7%) and Information Technology (14.4%) are the top three sectors.

The fund was launched in October last year and has attracted $465.1 million in assets so far, which are invested in 123 securities. It has returned year-to-date.

iShares MSCI All Country World Minimum Volatility Index Fund (NYSEARCA:ACWV)

ACWV is ideal for investors looking for low-volatility product with global exposure. It tracks MSCI All Country World Minimum Volatility Index, which is a capitalization weighted index of securities in the developed and emerging economies that have lower absolute volatility. The weight of the stocks in the index is determined by a rules based methodology.

The ETF holds 264 securities which are mainly invested in Consumer Staples (15.4%), Healthcare (14.4%) and Financials (13.7%) sectors.

ACWV has an expense ratio of 0.35% and a 30 day SEC yield of 3.87% currently. The fund invests about 53% of its assets in US securities while Japan (13%) and Canada (7%) occupy the next two spots in terms of country exposure.

The fund was launched in October last year and has collected $639.0 million in assets so far. It has returned 10.22% year-to-date.

iShares MSCI Emerging Market Minimum Volatility Index (NYSEARCA:EEMV)

EEMV is an ideal choice for the investors looking to participate in the emerging markets growth while limiting their portfolio volatility. No wonder it has proved to be one of the most popular emerging market ETFs, since its launch in October last year.

The ETF holds 213 securities from the Financials (25.7%), Consumer Staples (13.7%) and Telecom (13.7%) sectors. Taiwan (15.3%). China (13.1%) and South Korea (10.5%) are the top countries in terms of exposure. The fund charges a low expense ratio of 25 basis points (after contractual waiver of certain expense through end of 2014) while the 30 day SEC yield is 3.07%. It has rewarded the investors with an attractive 17.2% return till date this year.

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No positions in stocks mentioned.
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