iShares MSCI USA Min Vol Factor ETF (BATS: USMV)

最新ニュース iShares MSCI USA Min Vol Factor ETF (BATS:USMV)

iShares MSCI USA Min Vol Factor ETF

iShares Edge MSCI Min Vol USA ETF

iShares MSCI USA Minimum Volatility ETF

Technology

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Consumer Defensive

Industrials

Utilities

Consumer Cyclical

Communication Services

Energy

Basic Materials

Real Estate

The fund will invest at least 90% of its assets in the component securities of the index and may invest up to 10% of its assets in certain futures, options and swap contracts, cash and cash equivalents. The index measures the performance of large and mid-capitalization equity securities listed on stock exchanges in the U.S. that, in the aggregate, have lower volatility relative to the large- and mid-cap U.S. equity market.

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International Business Machines Corp.

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Waste Connections Inc

Berkshire Hathaway, Inc.

Duke Energy Corp.

Chubb Ltd.

Republic Services Inc. Class A

Texas Instruments Inc

Northrop Grumman Corp.

Walmart, Inc.

Cisco Systems Inc Csco

Progressive Corp.

Waste Management Inc

Mckesson Corp.1

iShares MSCI USA Minimum Volatility Factor ETF

Wall Street's darling rally just hit a technical speed bump. According to JPMorgan&#8217;s Jason Hunter, the S&amp;P 500 and its heavyweight tech crew — <a href="https://www.benzinga.com/topic/magnificent-seven">the Magnificent Seven</a> — are stuck below crucial resistance levels, raising the risk of a summer slump before any sustainable comeback.
<h1 class="wp-block-heading">S&amp;P 500 Faces Key Resistance</h1>
Hunter flags the 5425-5650 zone as a brick wall for the S&amp;P 500, noting that the index has already rejected that threshold in early-April and is still showing signs of fragility. While bulls may be eyeing fresh highs, JPMorgan's read is more cautious. According to Hunter, the index could slide back to 4500-4800 — a zone that could mark a "more durable bottom&#8221; — before setting up for a more solid rebound later this year.
<h1 class="wp-block-heading">Magnificent 7 Consolidating Below Breakdown Levels</h1>
But the real story, Hunter says, lies in the Magnificent 7 — Apple Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AAPL#NASDAQ">AAPL</a>), Microsoft Corp (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MSFT#NASDAQ">MSFT</a>), Alphabet Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/GOOGL#NASDAQ">GOOGL</a>) (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/GOOG#NASDAQ">GOOG</a>), Amazon.com Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AMZN#NASDAQ">AMZN</a>), NVIDIA Corp (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NVDA#NASDAQ">NVDA</a>), Meta Platforms Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/META#NASDAQ">META</a>) and Tesla Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TSLA#NASDAQ">TSLA</a>) — all of which have broken down from long-standing uptrends.
That, in Wall Street speak, means they're no longer leading the charge — at least for now.
Read Also: <a href="https://www.benzinga.com/25/04/44683681/exclusive-metas-still-the-mag-7-standout-says-expert-but-can-it-hold-on" target="_blank" rel="noreferrer noopener">EXCLUSIVE: Meta&#8217;s Still The Mag 7 Standout, Says Expert &#8211; But Can It Hold On?</a>
These &#8220;stocks are now consolidating within volatile ranges below their respective breakdown levels," Hunter wrote, suggesting investors may face more whiplash than windfall this summer.
The technical analyst isn't ruling out rebounds, but he's skeptical of anything more than short-term bounces: "The medium-term trend bias stays negative while below those resistance zones." Translation: don't chase the rips, especially if you&#8217;re expecting a V-shaped recovery.
<h1 class="wp-block-heading">Stay Cautious: Watch for Clear Bottoming Patterns</h1>
For investors, the implication is clear: tactically trim exposure to high-fliers and consider rotating into safety until the dust settles. 
ETFs like the Invesco S&amp;P 500 Low Volatility ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPLV#NYSE">SPLV</a>) and the iShares MSCI USA Min Vol Factor ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USMV#NYSE">USMV</a>) may offer a softer landing.
Meanwhile, those still bullish on AI and Big Tech could look to dollar-cost average into dips via diversified exposure through the Invesco QQQ Trust (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QQQ#NASDAQ">QQQ</a>) or the iShares U.S. Technology ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IYW#NYSE">IYW</a>) — but with a side of patience.
The bottom line? 
Until the S&amp;P 500 breaks above resistance and the Magnificent 7 prove they can reclaim lost ground, expect more chop than charge. Or, as Hunter subtly puts it, we need to "see clear price action that looks like a maturing bottoming process."
Read Next: 
<ul>
<li><a href="https://benzinga.com/trading-ideas/long-ideas/25/04/44977897/exclusive-nvidia-alphabet-microsoft-amazon-meta-now-in-the-bargain-bin-after-being-heavily-sold-off-says-expert" target="_blank" rel="noreferrer noopener">EXCLUSIVE: Nvidia, Alphabet, Microsoft, Amazon, Meta &#8211; Now In The Bargain Bin After Being &#8216;Heavily Sold Off&#8217;, Says Expert</a></li>
</ul>
Photo: <a href="https://www.shutterstock.com/g/Gumbariya">Gumbariya</a> via Shutterstock

Analyst Color

Macro Economic Events

Technicals

Economics

Analyst Ratings

Tech

Trading Ideas

AAPL

AMZN

GOOG

GOOGL

iShares Dow Jones US Technology Sector Index Fund

MSFT

NVDA

PowerShares S&P 500 Low Volatility Portfolio

SPLV

TSLA

USMV

S&P 500, Magnificent 7 Hit Resistance: Analyst Warns Of More Pain Before Gain

The detox phase may be over but don't expect investors to binge just yet. JPMorgan's equity strategy team, led by Dubravko Lakos-Bujas and Bhupinder Singh, thinks the worst <a href="https://www.benzinga.com/topic/tariffs">of tariff trauma</a> might be easing &#8211; though the business cycle hangover still lingers.
In a market update that channels equal parts caution and calculated optimism, the duo points to a subtle but significant pivot in policy tone. "The latest messaging from the Trump Administration seems to be shifting from tariffs to tax cuts and deregulation," they write a shift that may reduce the left tail risk that's had investors hiding in cash and hugging their low-leverage books.
But don't confuse hope with resolution. "Clarity and closure are still needed," JPMorgan warns, especially as trade chatter with China heats up again. Deals with Japan, Korea and India could serve as templates, but the big dragon in the room &#8211; China &#8211; remains the key.
President Donald Trump&#8216;s tariffs may come down, but will a complete rollback follow? Unlikely. Transshipment tricks and political posturing will keep some barriers in place.
<h2 class="wp-block-heading">Bearish Bias And Pain Trade</h2>
"Sentiment is very bearish," the strategists say, with many in the macro community brushing off positive trade signals thanks to "Trump exhaustion." Systematic portfolios have scaled back so aggressively that some are flirting with max short levels. Translation: the pain trade is up.
JPMorgan sees the S&amp;P 500 likely staying range-bound between 5,200 (base case) and 5,800 (bull case), driven by EPS estimates of $250 and $260, respectively, for 2025. But in the near term, the bias is upward as markets "preposition on tariff de-escalation."
For investors, that means playing defense might soon come at the cost of missing out. ETFs like the SPDR S&amp;P 500 ETF Trust (ARCA: SPY) and the Invesco QQQ Trust (NASDAQ: QQQ) could benefit if this pain trade reversal plays out.
Meanwhile, iShares MSCI USA Min Vol Factor TF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/USMV#NYSE">USMV</a>) remains a favorite among those still clinging to Low Volatility strategies &#8211; just look at the "sharp rise in Low Vol crowding," the report notes.
Read Also: <a href="https://www.benzinga.com/etfs/specialty-etfs/25/04/44962489/vix-is-still-wild-but-not-for-long-3-volatility-etfs-to-grab-before-calm-returns">VIX Is Still Wild, But Not for Long: 3 Volatility ETFs To Grab Before Calm Returns</a>
<h2 class="wp-block-heading">Momentum Out, Buybacks In</h2>
Even with volatility, JPMorgan expects a corporate silver lining. "US corporates to deliver record buyback executions," thanks to recent equity swings. That should provide some cushion &#8211; especially as the dollar dips, energy prices fall and easier monetary policy lurks.
Still, don't count on a multiple re-rating to the euphoric 22-24x highs. JPMorgan thinks a "~20x upper bound multiple is more reasonable," citing high-quality fundamentals, AI-driven capex cycles, and capital returns.
<h2 class="wp-block-heading">ETF Plays For A Murky Macro</h2>
As market clarity remains elusive, the strategists highlight the subtle Trump Put &#8211; volatility may be self-inflicted, but now there's an incentive to walk it back. That leaves opportunities for investors willing to hold their noses and look past the noise.
For those leaning into the upside risk:
<ul>
<li>SPY and QQQ for broad market exposure,</li>
<li>USMV for safety-first plays,</li>
<li>Vanguard Dividend Appreciation ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VIG#NYSE">VIG</a>) as buybacks and cash returns heat up,</li>
<li>iShares MSCI China ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MCHI#NYSE">MCHI</a>) for any surprise breakthroughs with Beijing.</li>
</ul>
The detox might be over, but the bull case is still waiting for its adrenaline shot. For now, investors may want to brace for a "range-bound" grind &#8211; with the pain trade whispering from the upside.
Read Next: 
<ul>
<li><a href="https://www.benzinga.com/markets/equities/25/04/45004528/sp-500-could-crash-37-to-3700-if-tariff-fallout-triggers-recession-warns-wolfe-research">S&amp;P 500 Could Crash 37% To 3,700 If Tariff Fallout Triggers Recession, Warns Wolfe Research</a></li>
</ul>
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Broad U.S. Equity ETFs

Specialty ETFs

Emerging Market ETFs

ETFs

MCHI

Trump Put Gets Louder, But Bulls Still Need A Map - JPMorgan Strategists See 'Pain Trade' To The Upside

The bond market is flashing warning signs, and investors are taking notice. <a href="https://www.benzinga.com/markets/25/03/44211421/us-economy-teetering-recession-may-be-looming-as-bond-market-reacts-to-trump-policies">Short-term Treasury yields have dipped sharply</a> as concerns about an economic slowdown grow, and analysts warn that a Federal Reserve rate cut may be on the horizon. Historically, signals like these have preceded recessions, prompting investors to shift toward defensive assets.
For those looking to safeguard their portfolios,<a href="https://www.benzinga.com/etfs"> ETFs that focus on stability</a> and essential industries can be a smart choice. Whether it&#8217;s low-volatility stocks, utilities, consumer staples, or government bonds, these ETFs help minimize risk while keeping your money at work. Let's explore the top options for weathering a potential downturn.
1. iShares MSCI USA Min Vol Factor ETF (BATS:<a class="ticker" href="https://www.benzinga.com/stock/USMV#BATS">USMV</a>)
For investors looking to stay in the stock market but reduce risk, the iShares MSCI USA Min Vol Factor ETF is a strong pick. This ETF focuses on large- and mid-cap stocks that have historically exhibited lower volatility. It's designed to limit downside risk, making it a great choice for risk-averse investors.
USMV's portfolio includes firms from sectors like technology, financials, healthcare, and consumer staples. While this ETF helps shield investors from large losses during downturns, it also means less upside potential in booming markets. USMV has a year-to-date return of 5.5% and a 12-month return of 13.5%, proving its ability to hold up well in uncertain times. During the downturn of 2020, this ETF was able to pare the losses within a year of its 2020 peak (February 21, 2020).
Also Read: <a href="https://www.benzinga.com/etfs/broad-u-s-equity-etfs/25/03/44165367/how-to-ride-out-market-turbulence-with-these-5-low-beta-etfs">How To Ride Out Market Turbulence With These 5 Low-Beta ETFs</a>
2. Utilities Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLU#NYSE">XLU</a>)
The utilities sector is often a safe haven during economic downturns. The Utilities Select Sector SPDR Fund offers diversified exposure to this sector, holding 31 companies. Its top five positions make up about 39% of its portfolio.
XLU has a low expense ratio of 0.09% and provides a dividend yield of 2.8% as of 2025. Since utility services like electricity and water remain in demand regardless of economic conditions, this ETF is a solid defensive choice. Over the past year, the ETF has delivered a 21.71% return.
3. Vanguard Consumer Staples ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VDC#NYSE">VDC</a>)
Consumer staples companies produce essential goods like food, beverages, and household products, which people buy regardless of the economic climate. The Vanguard Consumer Staples ETF offers exposure to this sector, holding 103 stocks while balancing exposure to industry giants like Coca-Cola (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/KO#NYSE">KO</a>) and Costco Wholesale Corp. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/COST#NASDAQ">COST</a>).
With an expense ratio of just 0.09%, VDC is an affordable way to invest in recession-resistant stocks. While consumer staples ETFs tend to be top-heavy, VDC provides a well-rounded mix of large and mid-sized companies.
The Market Signals You Should Watch
While defensive ETFs can help protect your portfolio, it's also important to understand why recession concerns are growing.
Investors have been moving into short-dated Treasuries, signaling concerns about an economic slowdown. Bloomberg <a href="https://www.bloomberg.com/news/articles/2025-03-09/the-bond-market-s-trump-trade-is-looking-like-a-recession-trade?srnd=homepage-americas&amp;sref=TBDibEcD">reports </a>that the Federal Reserve may start cutting interest rates as early as May to counteract slowing growth.
The inverted yield curve, where short-term bond yields exceed long-term yields, flashed warning signs in February, as the spread between three-month treasury yields and those of 10-year notes inverted last week. Historically, this has been a strong predictor of a recession knocking at the door. The curve had inverted in 2019, right before the economic downturn in 2020, according to Reuters.
Meanwhile, indicators such as the CNN Fear &amp; Greed Index <a href="https://edition.cnn.com/2025/03/10/investing/us-stocks-drop-after-trump-says-he-wont-rule-out-a-recession/index.html">dropping </a>into &#8220;Extreme Fear&#8221; territory and the Cboe Volatility Index (VIX) <a href="https://www.msn.com/en-us/money/markets/vix-surge-above-25-implies-above-average-but-far-from-perilous-recession-risk/ar-AA1ACR21?ocid=finance-verthp-feeds">spiking </a>to more than 25 reflect heightened investor anxiety.
Even Warren Buffett seems cautious, as Berkshire Hathaway is<a href="https://www.benzinga.com/markets/equities/25/03/44212672/jamie-dimon-cashed-out-234-million-in-jpmorgan-stock-warren-buffett-stockpiled-334-billion-in-cash-weeks-later-markets-crashed-coincidence"> sitting on record cash reserves</a> while trimming long-held positions.
Final Thoughts: Stay Prepared
Preparing your portfolio in advance rather than reacting at the last minute can help mitigate potential losses during economic downturns. Incorporating low-volatility equity ETFs, utility, and consumer staples funds can provide a more resilient foundation.
Read Next: 
<ul>
<li><a href="https://www.benzinga.com/25/03/44224174/wall-streets-worst-week-since-september-5-etfs-that-defied-the-market-slump">Wall Street&#8217;s Worst Week Since September: 5 ETFs That Defied The Market Slump</a></li>
</ul>
Photo: Shutterstock

COST

3 ETFs To Help You Navigate Market Volatility, Recession Risks

The stock market just got a fresh jolt of turbulence, and traders are buckling up for more. Monday's rollercoaster session saw the S&amp;P 500 index wipe out a staggering $1.5 trillion in value as trade war fears reignited. 
ETFs tracking the index closed lower: the SPDR S&amp;P 500 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>) closed lower by 1.75% while the Vanguard S&amp;P 500 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VOO#NYSE">VOO</a>) and the iShares Core S&amp;P 500 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IVV#NYSE">IVV</a>) were down 1.72% on Monday close.
Related: <a href="https://www.benzinga.com/general/social-media/25/03/44098232/markets-tank-after-trump-confirms-more-tariffs-heres-what-wall-street-is-saying">Markets Tank After Trump Confirms More Tariffs: Here&#8217;s What Wall Street Is Saying</a>
With tariffs on Canada, Mexico and China ramping up, volatility is officially back in business. The VIX has surged over 33% over the past month:
<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="696" height="449" src="https://editorial-assets.benzinga.com/wp-content/uploads/2025/03/04062926/Screenshot-2025-03-04-at-4.59.09-PM.png" alt="" class="wp-image-807881" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2025/03/04062926/Screenshot-2025-03-04-at-4.59.09-PM.png 696w,https://editorial-assets.benzinga.com/wp-content/uploads/2025/03/04062926/Screenshot-2025-03-04-at-4.59.09-PM-300x194.png 300w" sizes="(max-width: 696px) 100vw, 696px" /></figure>
Chart source: <a href="https://www.google.com/finance/quote/VIX:INDEXCBOE?sa=X&amp;ved=2ahUKEwiiwuP0qPCLAxV0Q2cHHSTZBhcQ3ecFegQIMhAX&amp;window=1M">Google Finance</a>
But for investors, chaos breeds opportunity &#8211; if you know how to play it.
<h2 class="wp-block-heading">1. The VIX Is Screaming &#8211; Use It</h2>
The Cboe Volatility Index ($VIX) is Wall Street's fear gauge, and when it spikes, traders take notice. With uncertainty surging, options-based strategies become lucrative. 
Investors can hedge against further market swings with the ProShares Ultra VIX Short-Term Futures ETF (BATS:<a class="ticker" href="https://www.benzinga.com/stock/UVXY#BATS">UVXY</a>) or the iPath Series B S&amp;P 500 VIX Short-Term Futures ETN (BATS:<a class="ticker" href="https://www.benzinga.com/stock/VXX#BATS">VXX</a>). 
But beware—these are short-term tools, not long-term holds.
<h2 class="wp-block-heading">2. Play Defense With Broad Market ETFs</h2>
When markets get rocky, smart money often rotates into low-volatility and defensive plays. 
The Invesco S&amp;P 500 Low Volatility ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPLV#NYSE">SPLV</a>) offers exposure to less turbulent stocks, while the iShares MSCI USA Minimum Volatility ETF (BATS:<a class="ticker" href="https://www.benzinga.com/stock/USMV#BATS">USMV</a>) helps cushion the downside. 
For those who expect more fireworks but want to stay long equities, the SPY remains a solid way to ride out the storm.
<h2 class="wp-block-heading">3. Don't Fight The Tape &#8211; Trade Trends</h2>
With uncertainty swirling, trend-following strategies gain an edge. Investors looking for short-term gains might consider the ProShares Short S&amp;P 500 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SH#NYSE">SH</a>) for bearish exposure or the ProShares UltraPro Short S&amp;P 500 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPXU#NYSE">SPXU</a>) for amplified downside bets. 
Meanwhile, gold, often a safe-haven asset, is seeing renewed interest through ETFs like SPDR Gold Shares (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GLD#NYSE">GLD</a>).
With Trump hinting at more "big" announcements by Wednesday night, expect the volatility train to keep rolling. The question isn't whether markets will move &#8211; it's whether you're ready to trade the storm.
Read Next: 
<ul>
<li><a href="https://www.benzinga.com/markets/bonds/25/03/44096578/leon-cooperman-says-he-likes-cash-calls-trumps-deficit-cutting-contractionary">Leon Cooperman Says He Likes Cash, Calls Trump&#8217;s Deficit Cutting &#8216;Contractionary&#8217;</a></li>
</ul>
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Long Ideas

SPXU

UVXY

Barclays Bank iPath S&P 500 VIX Short-Term Futures ETN

Tariffs, Trump, Tumult: How To Trade The Volatility Surge

Goldman Sachs Group Inc (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/gs#NYSE">GS</a>) is launching a brand new fund aimed at investors looking to play defense in a volatile stock market.
What Happened:&nbsp;In a <a href="https://www.sec.gov/Archives/edgar/data/1479026/000119312522195191/d379801d485apos.htm#toc379801_1">new prospectus</a> filed with the SEC, the company outlined&nbsp;plans for its Goldman Sachs Defensive Equity ETF. According to the filing, the fund will be designed to achieve long-term capital growth while maintaining lower volatility than equity markets.
&quot;The Fund will employ a &#39;Put Spread Collar&#39; overlay strategy whereby the Fund simultaneously purchases a near-the-money put while selling (writing) an out-of-the-money call and put on the S&amp;P 500&reg; Index or other national or regional stock market indices (or related exchange-traded funds,&quot; Goldman said&nbsp;in the filing.
Related Link: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/22/07/28055481/analyst-says-goldman-sachs-wells-fargo-offer-most-interesting-risk-reward-ahead-of-">Analyst Says Goldman Sachs, Wells Fargo Offer &#39;Most Interesting Risk-Reward&#39; Ahead Of Bank Earnings Week</a> 
In a nutshell, the goal of the new fund will be to provide similar returns to the SPDR S&amp;P 500 ETF Trust (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/spy#NYSE">SPY</a>) but with lower volatility and more downside protection.
Why It&#39;s Important: The S&amp;P 500 is down 18.8% year-to-date, and investors are understandably looking for ways to defend their portfolios from additional volatility and downside. Inflation numbers remain at multi-decade highs, and rising interest rates are threatening U.S. corporate earnings.
Related Link: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/22/07/28054186/the-market-is-now-pricing-in-a-1-july-interest-rate-hike-following-red-hot-cpi-infl">The Market Is Now Pricing In a 1% July Interest Rate Hike Following Red-Hot CPI Inflation Reading</a> 
Goldman is likely creating this new fund due to requests from its clients for more defensive <a href="https://www.benzinga.com/money/best-options-to-buy-this-week/">options</a>. Ironically, the fact that investors are seeking this kind of defensive investment and a major Wall Street bank such as Goldman is selling it could be a contrarian indicator that the worst of the 2022 stock market sell-off is already in the rear-view mirror.
In the filing, Goldman didn&#39;t include the potential ticker of the new fund or a prospective launch date. Investors looking to take a more defensive approach to the stock market already have several options.
The iShares MSCI USA Min Vol Factor ETF (BATS: <a class="ticker" href="https://www.benzinga.com/stock/usmv#BATS">USMV</a>) is a fund designed to mimic the MSCI USA Minimum Volatility Index, which includes large- and mid-cap stocks that have historically demonstrated low volatility. The utilities sector is also known for its relatively low volatility, so the Utilities Select Sector SPDR Fund (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/xlu#NYSE">XLU</a>) might be another good place to look for investors seeking to stay exposed to the stock market without the type of volatility they have experienced year-to-date.
Benzinga&#39;s Take: If the idea of Goldman&#39;s fund providing the same upside as the S&amp;P 500 with less risk sounds too good to be true, it probably is. In the past three years, the SPY fund has generated a 35.8% total return compared to a 26.4% total return for the XLU fund and just an 18.4% total return for the USMV fund.
Photo:&nbsp;<a href="https://www.shutterstock.com/g/Kirill+Wright">Wright Studio</a>&nbsp;via Shutterstock

An ETF To Protect Your Portfolio? Goldman Sachs Has a Product For You

Low volatility was the best-performing investment factor in 2018 and repeated that feat in 2019. Investors in the iShares Edge MSCI Min Vol USA ETF (CBOE:USMV) are hoping a three-peat in 2020.
<h3>What Happened</h3>
USMV, the largest reduced volatility exchange traded fund in the U.S., did its job on multiple fronts last year. Though the fund lagged the S&amp;P 500 by 350 basis points, it still gained 27.7% on the year while delivering 290 basis points less volatility. Additionally, investors added $12.5 billion to the iShares fund, a total surpassed by just two other ETFs.
&ldquo;The fund&rsquo;s 27% gain this year (2019) has likely helped spur interest, but we think the ability to gain lower-risk access to large-cap equities was appealing to many that were concerned that the Bull ride would not be a smooth one,&rdquo; <a href="https://www.cfraresearch.com/">CFRA Research</a> Director of ETF &amp; Mutual Fund Research Todd Rosenbluth wrote in a note out Thursday.
Rosenbluth has USMV pegged as CFRA&#39;s &ldquo;focus ETF&rdquo; for the month of January.
<h3>Why It&#39;s Important</h3>
While many forecasters expect the S&amp;P 500 to notch another annual gain this year, prevailing wisdom indicates upside be more subdued compared to 2019, a scenario that could benefit low volatility ETFs such as USMV.
&ldquo;However, looking to 2020, CFRA&#39;s Investment Policy Committee has established a year-end 2020 price target for the S&amp;P 500 of 3435, implying a 6.5% price gain over the closing level of December 23,&rdquo; said Rosenbluth. &ldquo;This reflects CFRA equity analysts&#39; target price differential for all stocks in the S&amp;P 500; historical precedent, such as annual returns during presidential election cycle years; earnings and inflation estimates as well as technical trends. Given a lower expected return, we think investors will continue to focus on ways to reduce their equity risk profile and USMV is built to do just that.&rdquo;
USMV, which follows the MSCI USA Minimum Volatility (USD) Index, allocates almost 28% of its combined weight to lower beta financial services and consumer staples names, but the technology sector <a href="https://www.ishares.com/us/products/239695/?referrer=tickerSearch">at almost 18%</a> is the fund&#39;s largest sector exposure.
<h3>What&#39;s Next</h3>
There are reasons investors have been flocking to USMV.
&ldquo;Beyond the fund&rsquo;s holdings, USMV is appealing to CFRA for other reasons,&rdquo; adds Rosenbluth. &ldquo;The ETF charges a modest 0.15% net expense ratio, trades more than four million shares on daily basis&mdash;with a tight penny bid/ask spread&mdash;and has bullish technical tendencies. Furthermore, the ETF&rsquo;s 0.66 three-year beta and 8.9 three-year standard deviation is well below the S&amp;P 500 Index&rsquo;s 1.0 and 11.9, respectively, highlighting its lower-risk historical attributes.&rdquo;
The analyst has an Overweight rating on USMV.
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An ETF Hoping For A Low Volatility Three-Peat

The primary objective of low volatility exchange traded funds is to defray risk and drawdowns when markets retreat, not capture all of the <a href="https://www.benzinga.com/trading-ideas/long-ideas/19/11/14739715/with-low-volatility-etfs-being-all-the-rage-this-one-sort-of-keeps-quiet">upside offered by a bull market</a>. Even with that in mind, investors aren&#39;t being cheated by volatility-reducing ETFs this year.
The&nbsp;iShares Edge MSCI Min Vol USA ETF (CBOE: USMV), the largest fund in this category, is higher by almost 26% year to date. Home to 209 stocks, USMV follows the MSCI USA Minimum Volatility (USD) Index and is doing its job of limiting turbulence as it has been 300 basis points less volatile than the S&amp;P 500 this year.
In other words, USMV investors are obviously winning due to the fund&#39;s price appreciation, but they&#39;re also winning the low volatility game.
<h3>Why It&#39;s Important</h3>
&ldquo;One strategy that has been appealing when it comes to capturing less market downside is minimum volatility,&rdquo; <a href="https://www.blackrockblog.com/2019/11/26/what-matters-more-making-money-or-not-losing-it/">BlackRock said in a recent note</a>. &ldquo;Minimum volatility is designed to reduce risk, while maintaining 100% equity exposure. Why is this important? Humans tend to experience the pain of losses more than the joys of equivalent gains, a bias known as &#39;loss aversion.&#39;&rdquo;
Although none of USMV&#39;s holdings command more than 1.51% weight of the fund&#39;s weight, components such as Coca-Cola (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/ko#NYSE">KO</a>) and PepsiCo (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/pep#NASDAQ">PEP</a>) don&#39;t exactly qualify as &ldquo;exciting.&rdquo; Upon closer examination, however, USMV reveals a more exciting, though not high risk profile. For example, the fund <a href="https://www.ishares.com/us/products/239695/?referrer=tickerSearch">devotes 18% of its weight</a> to technology stocks, an above-average weight to that sector among &ldquo;low vol&rdquo; ETFs.
Additionally, data suggest USMV&#39;s upside capture ratio is solid.
&ldquo;When we say that US minimum volatility has captured 80% of the upside of the S&amp;P 500 but only 59% of the downside, many investors assume that means the strategy has lagged but with lower risk,&rdquo; according to BlackRock. &ldquo;Yet, since its inception in 2008, minimum volatility has outperformed the S&amp;P 500 by 2% annualized.&rdquo;
<h3>What&#39;s Next</h3>
USMV has been doing brisk business this year. Of its $36.61 billion in assets under management, more than $14 billion, including $1.9 billion for the week ended Nov. 27, have flowed into the fund this year. That makes USMV the top asset gatherer among all U.S.-listed ETFs.
&ldquo;Strategies that focus on limiting volatility can add resilience, while offering investors the comfort to stay invested in the market through all environments,&rdquo; according to BlackRock. &ldquo;Think of upside/downside capture as one way to provide clarity on the road to pursuing long-term investment objectives.&rdquo;
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A Less Risky ETF With Plenty Of Rewards

The conversation involving low volatility exchange traded funds underscores investor&nbsp;bias for domestic large-cap stocks because that conversation is typically dominated by just two funds: the iShares Edge MSCI Min Vol U.S.A. ETF (CBOE:USMV) and the Invesco S&amp;P 500 Low Volatility ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/splv#NYSE">SPLV</a>).
Year to date, USMV has seen inflows of $12.82 billion, a total surpassed by just one other ETF. SPLV isn&#39;t a slouch, having pulled in $2.64 billion in new assets. Bottom line: investors are loving low vol ETFs this year and some market observers are growing concerned the <a href="https://twitter.com/cfromhertz/status/1188593799536218113">trade is increasingly crowded</a>.
That may be the case and it may affirmed by the fact that SPLV and USMV aren&#39;t the only low volatility funds see significant inflows.
<h3>Why It&#39;s Important </h3>
The Invesco S&amp;P MidCap Low Volatility ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/xmlv#NYSE">XMLV</a>), the mid-cap counterpart to the aforementioned SPLV, has been a prodigious adder of assets this year. As of Nov. 5, XMLV had $3.59 billion in assets under management, <a href="https://www.invesco.com/portal/site/us/financial-professional/etfs/product-detail?productId=XMLV">according to issuer data</a>.
Based on that figure and just over 50 dedicated mid-cap ETFs listed in the U.S., just nine members of that group are larger than XMLV.
It may be a stretch to call XMLV a crowded traded, but data confirm there&#39;s been recent enthusiasm for the fund. Over the past 90 days, investors have added $421.55 million to the low vol mid-cap ETF, a total surpassed by just <a href="https://www.invesco.com/portal/site/us/financial-professional/etfs/tools/flow-trend-tracker">three other Invesco ETFs</a>, including SPLV.
Year to date, XMLV has garnered inflows of $1.40 billion, good for second-best in the Invesco stable behind only SPLV.
<h3>What&#39;s Next </h3>
Although the low volatility trade appears crowded, there are no guarantees it&#39;s ending anytime soon. Even it does, that doesn&#39;t mean severe repudiation of XMLV.
As it is, XMLV is proving to be a viable alternative to traditional, diversified mid-cap funds. Year to date, the Invesco ETF is up 21.1%, trailing the S&amp;P MidCap 400 Index by 50 basis, but the fund has been 480 basis points less volatile than the mid-cap benchmark, confirming superior risk-adjusted returns.
That may be enough to continue luring investors to XMLV.
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XMLV

With Low Volatility ETFs Being All The Rage, This One (Sort Of) Keeps Quiet

On <a href="https://www.cnbc.com/video/2019/10/09/final-trades-southwest-dunkin-disney-more.html">CNBC&#39;s &quot;Fast Money Halftime Report,&quot;</a> Joe Terranova revealed he has a long position in Dunkin Brands Group Inc (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/dnkn#NASDAQ">DNKN</a>). He would buy it at its current price level.
Meghan Shue wants to buy iShares Edge MSCI Min Vol USA ETF (AMEX: USMV). She explained it has outperformed broader index year-to-date so it is a good place to hang out and wait for more clarity.
Michael Farr is a buyer of Walt Disney Co (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/dis#NYSE">DIS</a>).
Jon Najarian saw unusual call buying in SPDR S&amp;P Oil &amp; Gas Explore &amp; Prod. (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/xop#NYSE">XOP</a>). He would buy it.
Pete Najarian thinks Southwest Airlines Co (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/luv#NYSE">LUV</a>) is going to move higher.
&nbsp;

Media

DNKN

'Fast Money Halftime Report' Picks For October 9

On <a href="https://www.cnbc.com/video/2019/06/05/final-trades-constellation-brands-public-storage-gold-miners-and-volatility.html">CNBC&#39;s &quot;Fast Money Halftime Report&quot;</a>, Meghan Shue said higher volatility is here to stay. She would buy iShares Edge MSCI Min Vol USA ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/usmv#NYSE">USMV</a>) because it gives exposure to the market, but it has lower volatility.
Jon Najarian is a buyer of Public Storage (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/psa#NYSE">PSA</a>). He noticed unusual call options activity in the name.
Learn from Jon Najarian and other traders in person at the <a href="https://go.benzinga.com/video-1">Benzinga Global Trading &amp; Investing Summit June 20 in New York City</a>!
Pete Najarian likes VanEck Vectors Junior Gold Miners ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/gdxj#NYSE">GDXJ</a>).
Jim Lebenthal wants to buy Constellation Brands, Inc. Class A (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/stz#NYSE">STZ</a>).

GDXJ

Constellation Brands, Pure Storage And More: 'Fast Money Halftime Report' Picks For June 5

Through May 13, the S&amp;P 500 was sporting a month-to-date loss of around 4 percent. A loss like that in such a small time frame often prompts investors to assess defensive strategies.
Exchange traded funds offer investors plenty of avenues <a href="https://www.benzinga.com/analyst-ratings/analyst-color/19/05/13729637/getting-defensive-with-sector-etfs">for getting defensive</a>, whether it be at the sector level or via broader market funds.
<h3>What Happened</h3>
Some of investors&#39; favorite ETF destinations when volatility rises are low volatility funds, such as the iShares Edge MSCI Min Vol USA ETF (CBOE: USMV) and the Invesco S&amp;P Low Volatility ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/splv#NYSE">SPLV</a>). With the seasonally weak period of the year for stocks here, investors may increasingly gravitate to funds such as SPLV and USMV.
&ldquo;The relatively weak performance for the S&amp;P 500 thus far in May is consistent with historical trends,&rdquo; said CFRA Research&#39;s Director of ETF &amp; Mutual Fund Research Todd Rosenbluth <a href="https://www.cfraresearch.com/">in a recent note</a> . &ldquo;According to Sam Stovall, Chief Investment Strategist at CFRA, the May-October period has been the weakest of the six months of the calendar, with the S&amp;P 500 posting an average gain of only 1.4% since 1946.&rdquo;
<h3>Why It&#39;s Important</h3>
Broadly speaking, stocks were faltering this month, but SPLV and USMV met their primary objective, which is to perform less poorly than the broader market when stocks decline. While the S&amp;P 500 was down 4 percent as of May 15, SPLV and USMV were lower by 0.70 percent and 1.60 percent, respectively.
Investors &ldquo;could use lower volatility ETFs, which tend to have higher relative weightings in defensive sectors,&rdquo; said Rosenbluth. &ldquo;However, it is important to look inside since they are not constructed the same and they are heavily reconstituted throughout the year, unlike the market-cap weighted S&amp;P 500 Index.&rdquo;
SPLV&#39;s relative durability can be traced to its significant weights to defensive sectors. As of May 14, the Invesco ETF allocated a combined <a href="https://www.invesco.com/portal/site/us/financial-professional/etfs/product-detail?productId=SPLV">44.73 percent of its</a> weight to the defensive utilities and real estate sectors. USMV devotes nearly 17 percent of its weight to utilities and real estate stocks.
<h3>What&#39;s Next</h3>
USMV has some cyclical exposure with a combined weight of over 26 percent to technology and consumer discretionary stocks, indicating SPLV might be the way to go over the near-term for highly conservative investors. CFRA has Overweight ratings on both ETFs. Over the past year, investors have added <a href="https://www.invesco.com/portal/site/us/financial-professional/etfs/tools/flow-trend-tracker">$2.30 billion to SPLV</a>, making the fund the top asset gatherer among all Invesco ETFs over that period.
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How You Can Ratchet Down Risk With These Popular ETFs

In the first quarter, low volatility exchange traded funds were <a href="https://www.benzinga.com/trading-ideas/long-ideas/19/03/13437219/investors-really-love-low-volatility-etfs-this-year">popular with investors</a>. The&nbsp;iShares Edge MSCI Min Vol USA ETF (CBOE: USMV) finished the first quarter higher by more than 12 percent while hauling in $3.48 billion in new assets, a total surpassed by just three other U.S.-listed ETFs.
<h3>What Happened</h3>
Investors&#39; renewed affinity for reduced volatility strategies in the first quarter came against the backdrop of rising equity prices following a fourth-quarter that in some part fostered fresh demand for minimum volatility fare.
&ldquo;The selloff from October 3rd to December 24th dragged the S&amp;P 500 Index down by 20% and the Russell Small-cap index more than 24%,&rdquo; said BlackRock <a href="https://www.blackrockblog.com/2019/03/28/defensive-investing-roadmap/">in a recent note.</a> &ldquo;This was driven primarily by fears of continued rate hikes by the Federal Reserve, valuation concerns and worries about a global growth slowdown.&rdquo;
<h3>Why It&#39;s Important</h3>
USMV makes good on its promise to reduce volatility. Over the past three years, the fund&#39;s annualized volatility was 9.8&nbsp;percent, or 270 basis points less than the annualized volatility on the S&amp;P 500. During that span, USMV&#39;s maximum drawdown <a href="https://www.etfreplay.com/charts.aspx">was 12.7&nbsp;percent </a>compared to 19.30 percent on the S&amp;P 500.
&ldquo;These large draw-downs are a far cry from the relatively quiet markets seen in recent years, which drove investors to seek exposures to pro-cyclical market areas such as momentum stocks or high yield credit,&rdquo; said BlackRock. &ldquo;As investors adjust to a lower growth paradigm, investors may want to consider exposures that either offer limited downside protection such as minimum volatility strategies or that move less in sync with equity and bonds such as in commodities.&rdquo;
While USMV <a href="https://www.benzinga.com/trading-ideas/long-ideas/19/03/13437219/investors-really-love-low-volatility-etfs-this-year">is positioned defensively</a>, it&#39;s not entirely bereft of potential excitement and growth opportunities. The fund allocates 16.39 percent of its weight to technology stocks, its largest sector weight. Healthcare and financial services names combine for almost 27 percent of USMV&#39;s weight.
<h3>What&#39;s Next</h3>
Data confirm that investors are embracing low volatility ETFs, sometimes at the expense more volatile factor strategies.
&ldquo;Minimum volatility strategies are attracting the biggest flows this year among factors, gaining $5.78 billion, while momentum has seen nearly $0.6 billion in outflows,&rdquo; according to BlackRock.
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News

A Good Time To Play Defense

One of the notable themes emerging in the world of exchange traded funds in the first quarter is investors&#39; preference for low volatility funds.
Perhaps chastened by the fourth-quarter equity market swoon, investors are pouring into ETFs that aim to reduce volatility.
<h3>What Happened</h3>
The&nbsp;iShares Edge MSCI Min Vol USA ETF (CBOE: USMV) is the largest low volatility in the U.S. and is one of this year&#39;s top asset gatherers. Investors have added $3.11 billion to USMV since the start of the year, a total surpassed by just five other U.S.-listed ETFs.
USMV, which tracks the MSCI USA Minimum Volatility (USD Optimized) Index, is rewarding investors&#39; faith. The fund is higher by 12 percent year to date.
<h3>Why It&#39;s Important</h3>
Don&#39;t forget the Invesco S&amp;P 500 Low Volatility ETF (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/splv#NYSE">SPLV</a>), the fund that started the low volatility ETF trend in the U.S. SPLV and USMV use different approaches to deliver investors equity exposure with less volatility.
SPLV, the oldest low volatility ETF in the U.S., follows the S&amp;P 500 Low Volatility Index, which is a collection of the 100 S&amp;P 500 components with the lowest trailing 12-month volatility. That approach, although more prosaic than USMV&#39;s methodology, is being embraced by investors.
With year-to-date inflows of just over $1 billion, SPLV recently topped the $10 billion in assets under management mark. This year, SPLV has added more new assets than any other Invesco ETF, <a href="https://www.invesco.com/portal/site/us/financial-professional/etfs/tools/flow-trend-tracker">according to data</a> from the fourth-largest U.S. ETF sponsor. Over the past year, investors have added $2.10 billion to SPLV, good for the second-best total among all Invesco ETFs.
<h3>What&#39;s Next</h3>
Though SPLV is sector agnostic, sectors with favorable volatility traits often keep those traits for extended periods of time. Said another way, SPLV is frequently heavily allocated to the utilities sector. That&#39;s the case today as the group represents over a quarter of <a href="https://www.invesco.com/portal/site/us/financial-professional/etfs/product-detail?productId=SPLV">the fund&#39;s weight</a>.
The real estate sector is SPLV&#39;s second-largest sector weight at 20.38 percent. Good news for SPLV investors: utilities and real estate are two of this year&#39;s best-performing groups. On the other hand, the risk here is obvious. If Treasury yields suddenly spike, SPLV could be vulnerable due to its rate-sensitive sector allocations.
Investors should note there&#39;s a value bias with SPLV as almost 41 percent of its holdings are considered value stocks compared to less than 13 percent being growth names.
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Investors Really Love Low Volatility ETFs This Year

With just a day away to the month of May, investors have turned cautious given that seasonality will play a huge role in pushing stocks down for the next six months, as per the old adage &quot;Sell in May and Go Away.&quot; According to this investment saying, the stock market has a long history of weak performance during the summer months (May to October).
	Will May 2018 Pen the Same Story?
	After a blockbuster start, the U.S. stock market was hit by a series of hurdles including inflationary pressures, a faster-than-expected rates hike, political instability in Washington, geopolitical tension, technology sector turmoil and rising yields.
	Additionally, the signal from European Central Bank to end the cheap money era policy anytime soon and the latest round of domestic economic data added to the weakness.
	This is especially true as America&#39;s economic growth slowed to start the year with 2.3% in the first quarter compared with 2.9% in fourth-quarter 2017 driven by weak consumer spending in nearly five years. Domestic demand rose 1.7% -- the slowest in two years -- after rising at a brisk 4.8% pace in the final three months of 2017.
	However, tightening labor market conditions, lower tax rates, strong earnings expectations and increased government spending are expected to spur economic growth in the coming months, thereby resulting in a bullish condition for the stock market. In particular, the massive $1.5-trillion tax cut will create an economic surge, boosting job growth in manufacturing and other sectors, increasing inflation and interest rates. Additionally, it would lead to higher earnings, increased buyback activities and fat dividends.
	Against such a backdrop, it might be foolish to quit the stock market altogether. Instead, investors could follow some ideas that could lead to a winning portfolio during this soft six-month period.
	Focus on Low Volatility ETFs
	As weak historical trends and volatility are expected to play foul in the stock market, low volatility ETFs appear sensible choices. This is because these have the potential to outpace the broader market in bearish-to-neutral market conditions, providing significant protection to the portfolio. These funds include more stable stocks that have experienced the least price movement in their portfolio. Further, these allocate more to defensive sectors that usually have a higher distribution yield than the broader markets.
	While there are several options in the space, the two most popular ones are PowerShares S&amp;P 500 Low Volatility Portfolio&nbsp;(NYSE: <a class="ticker" href="/stock/splv#NYSE">SPLV</a>) and iShares Edge MSCI Min Vol USA ETF&nbsp;(BATS:USMV).
	Emphasis on Value ETFs
	Value stocks have proven to be outperformers over the long term and are less susceptible to trending markets. These stocks have strong fundamentals &mdash; earnings, dividends, book value and cash flow &mdash; that trade below their intrinsic value and are undervalued. These have the potential to deliver higher returns and exhibit lower volatility compared with their growth and blend counterparts.
	Some of the Zacks ETF Rank #2 ETFs are Vanguard Value ETF&nbsp;(NYSE: <a class="ticker" href="/stock/vtv#NYSE">VTV</a>), Schwab U.S. Large-Cap Value ETF&nbsp;(NYSE: <a class="ticker" href="/stock/schv#NYSE">SCHV</a>), Vanguard Mega Cap Value ETF&nbsp;(NYSE: <a class="ticker" href="/stock/mgv#NYSE">MGV</a>) and PowerShares Dynamic Large Cap Value Portfolio&nbsp;(NYSE: <a class="ticker" href="/stock/pwv#NYSE">PWV</a>).
	Overweight Dividend ETFs
	The dividend-paying securities are the major sources of consistent income for investors when returns from the equity market are at risk. This is especially true as these stocks offer the best of both these world&#39;s &mdash; safety in the form of payouts and stability in the form of mature companies that are less volatile to the large swings in stock prices. The companies that pay dividends generally act as a hedge against economic uncertainty and provide downside protection by offering outsized payouts or sizable yields on a regular basis.
	While the dividend space has been crowded, ETFs with stocks having a strong history of dividend growth seem to be good picks. Vanguard Dividend Appreciation ETF&nbsp;(NYSE: <a class="ticker" href="/stock/vig#NYSE">VIG</a>) and ProShares S&amp;P 500 Aristocrats ETF&nbsp;(BATS:NOBL) have a Zacks ETF Rank #2.
	Invest in Defensive ETFs
	Investors could try out safer avenues and rotate into defensive sectors, like utilities, healthcare, and consumer staples, which generally outperform during periods of low growth and high uncertainty. Additionally, this is a much better option than holding cash. Guggenheim Defensive Equity ETF&nbsp;(NYSE: <a class="ticker" href="/stock/def#NYSE">DEF</a>)&nbsp;could be an excellent choice. This fund offers equal-weight exposure to all the stocks in the index, resulting in a more balanced and diversified portfolio. It helps the portfolio to better weather periods of volatility, while remaining positioned to take advantage of market upswings.
	The other popular ETFs include Consumer Staples Select Sector SPDR Fund&nbsp;(NYSE: <a class="ticker" href="/stock/xlp#NYSE">XLP</a>), Vanguard Consumer Staples ETF&nbsp;(NYSE: <a class="ticker" href="/stock/vdc#NYSE">VDC</a>), SPDR Health Care Select Sector SPDR Fund&nbsp;(NYSE: <a class="ticker" href="/stock/xlv#NYSE">XLV</a>), Vanguard Health Care ETF&nbsp;(NYSE: <a class="ticker" href="/stock/vht#NYSE">VHT</a>) and iShares Dow Jones U.S. Healthcare Sector Index Fund&nbsp;(NYSE: <a class="ticker" href="/stock/iyh#NYSE">IYH</a>).

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Markets

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NOBL

PowerShares Exchange Traded Fund Trust Dynamic Large Cap Value Portfolio

SCHV

Don't Sell In May And Go Away: Follow These ETF Strategies

A frequent criticism of low volatility exchange-traded funds is that these funds leave some upside on the table during bull markets. That critique misses the mark because the objective of low volatility strategies is not to capture all of the upside in a bull market, but rather to perform less poorly relative to traditional funds when markets swoon.
Although the sample size for 2018 is small, the &nbsp;iShares Edge MSCI Min Vol USA ETF (CBOE:USMV) and the PowerShares S&amp;P 500 Low Volatility Portfolio (NYSE: <a class="ticker" href="/stock/splv#NYSE">SPLV</a>) have some work to do to regain investors&#39; confidence.
Entering Monday, the S&amp;P 500 sported a 2 percent year-to-date loss while USMV and SPLV were down an average of 3.2 percent. To be fair, SPLV and USMV have been significantly less volatile than the cap-weighted S&amp;P 500 to start 2018.
<h3>
	Still Reasons To Believe</h3>
While the low volatility factor is clearly struggling in the early part of 2018, some analysts believe strategies such as SPLV and USMV could prove rewarding as this year moves forward.
&ldquo;Even though the worst might not be over, CFRA is not projecting the start of a new bear market, since we don&#39;t forecast a recession,&rdquo; said <a href="https://newpublic.cfraresearch.com/">CFRA Research</a> Director of ETF &amp; Mutual Fund Research Todd Rosenbluth in a Monday note. &ldquo;In 2018, CFRA sees real GDP rising 3.1 percent and S&amp;P 500 EPS up more than 19 percent. As such, investors could benefit from staying with large cap strategies that have historically been less volatile.&rdquo;
SPLV has recently been hampered by its almost 20 percent weight to the utilities sector, which has been one of the worst-performing groups since late last year. USMV&#39;s utilities weight is just 7.3 percent compared to 19.7 percent in SPLV.
&ldquo;In 2017, when risk was being rewarded in the equity market, SPLV&#39;s 17 percent return was, not surprisingly, below the 22 percent for SPDR S&amp;P 500,&rdquo; said Rosenbluth. &ldquo;However, the three-year annualized standard deviation for SPLV of 9.27 was 9 percent lower than SPY, while its beta was just 0.64 (SPY has a beta of 1).&rdquo;
<h3>
	Examining USMV</h3>
USMV allocates almost 37 percent of its combined weight to technology and healthcare stocks while financial services and consumer staples stocks combine for almost 24 percent.
&ldquo;USMV rose 19 percent in 2017, ahead of SPLV, but still behind SPY,&rdquo; said Rosenbluth. &ldquo;The iShares ETF also has a lower annualized three-year standard deviation of 8.53, but a beta of 0.67, highlighting the importance of understanding the distinctions of these two similar sounding ETFs and the broader market.&rdquo;
CFRA has Overweight ratings on SPLV and USMV.
Related Links:
<a href="https://www.benzinga.com/analyst-ratings/analyst-color/18/02/11174263/finding-opportunity-in-steel-etfs">Sturdy Steel ETFs</a>
<a href="https://www.benzinga.com/analyst-ratings/analyst-color/18/02/11174259/utilities-slump-could-be-nearing-its-end">Utilites Slump Is Close to Over</a>

Low Volatility ETFs Try To Shed Disappointing Ways

After a prolonged period of calm, Wall Street witnessed the biggest one-day drop in more than a year and the steepest weekly loss in about two years. Both the Dow Jones and the S&amp;P 500 declined nearly 4% last week with a higher number of declining stocks. The number of declining stocks reached more than <a href="https://finance.yahoo.com/news/caution-wall-street-caps-off-001424842.html">27,000</a>, the highest since at least July 2014 and the number of stocks hitting yearly lows reached 3,000, a number not seen since 2016. All these signal the start of a tumultuous period in markets.
	The sell-off came after a stronger-than-expected jobs report that has sparked fears of inflation and the resultant anticipation of increase in interest rates aggressively. Average hourly wages rose 0.3%, pushing the year-over-year increase to 2.9% &mdash; the fastest pace in more than eight years. Additionally, political turmoil including a government funding deadline on Feb 8 and upcoming debt limit issue as well as threats of overvaluation have added to the woes (read: <a href="https://www.zacks.com/stock/news/289330/best-dividend-growth-etfs-for-rising-rates">Best Dividend Growth ETFs for Rising Rates</a>).
	However, the stock market is currently in a much better condition thanks to encouraging domestic and international fundamentals, better-than-expected corporate earnings and the new tax legislation. The massive $1.5-trillion tax cuts will create an economic surge, boosting job growth and earnings of corporates.
	About halfway through the earnings season, the picture appears to be solid with all around <a href="https://www.zacks.com/commentary/147830/earnings-estimates-going-higher">strength and momentum</a>. Not only is an above-average proportion of companies beating top- and bottom-line expectations, but estimates for the current period are also materially going up.
	The latest sell-off and still brightened stock outlook could prompt investors to re-access their portfolio. For them, we have highlighted some of the equity ETF picks that could perform well in a volatile market reducing the risk of a downside:
	Low Volatility: iShares Edge MSCI Min Vol USA ETF USMV
	This fund offers exposure to 207 U.S. stocks having lower volatility characteristics than the broader U.S. equity market by tracking the MSCI USA Minimum Volatility Index. It is well spread across a number of securities with none holding more than 1.6% of assets. From a sector look, information technology, health care, consumer staples, financials and industrials take the top five spots with a double-digit allocation each. With AUM of $15.1 billion, the product charges 0.15% in expense ratio and trades in solid average daily volume of 1.4 million shares. It has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.
	Risk-Based: Nationwide Risk-Based U.S. Equity ETF RBUS
	This ETF follows the R Risk-Based US Index and employs a risk-based strategy that seeks to provide upside potential while protecting against losses stemming from volatility. It holds well-diversified 251 stocks in its basket, with none of the securities accounting for more than 1.51% share and none of the sectors making up for more than 16% of assets. RBUS is newly debuted in the space and has accumulated $120.3 million within five months. It charges 30 bps in annual fees and trades in a thin volume of 2,000 shares a day on average (read: <a href="https://www.zacks.com/stock/news/290587/volatility-etfs-advance-on-rising-yields">Volatility ETFs Advance On Rising Yields</a>).
	Low Beta: PowerShares Russell 1000 Low Beta Equal Weight Portfolio USLB
	This fund seeks to track the performance of the Russell 1000 Low Beta Equal Weight Index, holding 372 stocks exhibiting low-beta characteristics. It is widely diversified across components with each security accounting for less than 0.4% of assets. The top five sectors &mdash; information technology, consumer discretionary, real estate, consumer staples, and industrials &mdash; receive a double-digit allocation each. USLB has accumulated $157.1 million and charges 35 bps in annual fees. Volume is light, exchanging about 12,000 shares per day on average. The fund has a Zacks ETF Rank #3 with a Medium risk outlook.
	Value: iShares Russell 1000 Value ETF IWD
	This ETF offers exposure to U.S. companies that are thought to be undervalued by the market relative to comparable companies by tracking the Russell 1000 Value Index. It holds 713 stocks in its basket with each accounting for no more than 3.14% share. From a sector look, financials takes the largest allocation at 27.4%, followed by healthcare (13.7%) and energy (10.8%).&nbsp; It is the most popular and liquid option in the value space with AUM of $39.6 billion and average daily volume of 2 million shares. The product charges 20 bps in annual fees and has a Zacks ETF Rank #3 with a Medium risk outlook (read: <a href="https://www.zacks.com/stock/news/285295/value-investing-set-to-shine-on-tax-reform-5-cheap-etfs">Value Investing Set to Shine on Tax Reform: 5 Cheap ETFs</a>).
	Mid-Cap: Vanguard Mid-Cap Value ETF VOE
	This fund provides investors exposure to the mid-cap segment of the broad market with a value tilt. Investors should note that mid caps offer the best of both the worlds, allowing growth and stability in portfolios simultaneously. These middle-of-road securities are arguably safer options and have the potential to move higher in turbulent times. VOE follows the CRSP US Mid Cap Value Index, holding well-diversified 206 stocks, with each making up for no more than 1.3% of assets. However, about 26.4% of the portfolio is skewed toward financials while consumer goods, consumer services and industrials round off the next three. Expense ratio comes in at 0.07%. The ETF has amassed $8.7 million in its asset base and trades in a good average volume of 232,000 shares a day. It has a Zacks ETF Rank #3 with a Medium risk outlook.
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USLB

Wall Street Sees Worst Sell-Off In Years: 5 ETF Buying Zones

The world of ETFs has seen a huge transformationover the last few years. Currently worth over <a href="https://www.ft.com/content/89c18106-3591-11e7-bce4-9023f8c0fd2e">$4.0 trillion</a>, the global ETF industry has witnessed exponential growth. The U.S. market is worth over $3.3 trillion, derived from about 2,096 exchange traded products.
The styles and modes of investments are however changing. This is especially true given the fact that issuers need to keep pace with the fast-changing market environment. There is always a pressure to beat the benchmark, navigating tough trading times and peer pressure.
In a nutshell, gone are the days of plain vanilla ETFs or market-cap weighted ETFs. Products with several winning attributes or factor-based, like low volatility or high dividend ETFs, are being launched by issuers. These next generation ETFs are called smart-beta ETFs.
And what could be better if these smart-beta criteria can be incorporated into the active ETFs? These funds are more dynamic. Investopedia goes on to explain that an <a href="https://www.investopedia.com/terms/a/actively-managed-etf.asp">actively managed ETF will have a benchmark index</a>, but managers may alter sector allocations to maximize returns, market-time trades or shift from the index if they feel like.
The importance of this dynamic approach has long been ignored by one of the largest ETF issuers &ndash; Vanguard, if we ignore its <a href="http://www.etf.com/sections/daily-etf-watch/vanguard-plans-1st-active-etfs?nopaging=1">dividend and style funds</a>. But not anymore. The issuer recently filed a set of <a href="http://www.etf.com/sections/daily-etf-watch/vanguard-plans-1st-active-etfs?nopaging=1">actively managed smart-beta ETFs</a> for the first time in the United States. The asset manager already has such smart beta funds in <a href="https://www.bloomberg.com/news/articles/2017-11-28/vanguard-s-first-active-smart-beta-etfs-coming-soon-to-the-u-s?utm_source=yahoo&amp;utm_medium=bd&amp;utm_campaign=headline&amp;cmpId=yhoo.headline&amp;yptr=yahoo">Canada and the United Kingdom</a>, per an article published on Bloomberg (read: <a href="https://www.zacks.com/stock/news/262875/will-active-etfs-rule-ahead">Will Active ETFs Rule Ahead?</a>).
Inside Newly-Filed Funds 
Vanguard&#39;s recently filed funds include&nbsp; Vanguard U.S. Minimum Volatility ETF,&nbsp;Vanguard U.S. Value Factor ETF, Vanguard U.S. Momentum Factor ETF, Vanguard U.S. Liquidity Factor ETF,&nbsp;Vanguard U.S. Quality Factor ETF and Vanguard U.S. Multifactor ETF.
The single-factor funds will charge a fee of <a href="http://www.etf.com/sections/daily-etf-watch/vanguard-plans-1st-active-etfs?nopaging=1">13 bps</a>, while the expense ratio of multifactor funds will be 0.18%. Stocks will represent all market cap &ndash; <a href="http://www.etf.com/sections/daily-etf-watch/vanguard-plans-1st-active-etfs?nopaging=1">large, mid and small</a>.
Factors That Led Vanguard to Walk This Path
One of Vanguard&#39;s closest peers &ndash; BlackRock &ndash; has seen its smart beta assets swell by almost <a href="https://www.ft.com/content/d82a6032-a9f0-11e7-ab66-21cc87a2edde">180% to $288 billion</a> over the past five years, per an article published on Financial Times. Probably, this immense achievement lured Vanguard to join the bandwagon (read: read: <a href="https://www.zacks.com/stock/news/255615/smart-beta-investing-fad-or-future-of-the-etf-industry">Smart Beta Investing: Fad or Future of the ETF Industry?</a>).
Vanguard&#39;s own success is no less. &quot;BlackRock and Vanguard are the only asset managers globally with more than $100 billion in smart beta products,&quot; per the Financial Times article. So, the issuer is already aware of the appeal of such an investing strategy.
Competition 
Vanguard appears to be a late entrant in this field. BlackRock&#39;s U.S. Minimum Volatility ETF USMV) is the highest asset grosser in this field, charging 15 bps in fees. iShares Edge MSCI USA Value Factor ETF VLUE, which has an expense ratio of 15 bps, will give competition to Vanguard&#39;s value fund (read: <a href="https://www.zacks.com/stock/news/243517/blackrock-slashes-fees-etf-price-war-intensifies">BlackRock Slashes Fees, ETF Price War Intensifies</a>).
There is iShares Edge MSCI USA Momentum Factor ETF MTUM (expense ratio 0.15%) in the momentum space. iShares Edge MSCI USA Quality Factor ETF QUAL also charges 15 bps fees. iShares Edge MSCI Multifactor USA ETF LRGF (expense ratio of 0.20%) may also pose threat to the multifactor Vanguard fund.
However, cheaper expense ratios have always been Vanguard&#39;s unique selling propositions. Its planned expense ratios are relatively inexpensive when compared to other smart-beta and active ETFs. Therefore, this low fee factor and Vanguard&#39;s brand recognition are likely to prove beneficial for the newly-filed funds, if approved.
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New ETFs

LRGF

MTUM

QUAL

VLUE

Vanguard Plans To Foray Into Smart-Beta Active ETF World

Although higher beta momentum strategies and stocks have been performing well this year, some low volatility exchange-traded funds are at least keeping pace with the S&amp;P 500. For example, the &nbsp;iShares Edge MSCI Min Vol USA ETF (NYSE: <a class="ticker" href="/stock/usmv#NYSE">USMV</a>) and the PowerShares S&amp;P 500 Low Volatility Portfolio (NYSE: <a class="ticker" href="/stock/splv#NYSE">SPLV</a>) are up an average of 11.8 percent year to date.
USMV and SPLV are the two largest low volatility ETFs trading on U.S. exchanges, but as has been noted over the years, there are significant differences between the two kings of the low volatility ETF space.
&ldquo;USMV is the largest of the low/minimum volatility ETFs with $14 billion in assets,&rdquo; said <a href="https://newpublic.cfraresearch.com/">CFRA Research</a> Director of ETF &amp; Mutual Fund Research Todd Rosenbluth in a note Monday. &ldquo;USMV tracks an optimized index aiming to generate the lowest absolute volatility with sector constraints of 500 basis points relative to its parent MSCI USA index. USMV is reconstituted on a semi-annual basis, most recently in May, to reflect shifting market movements.&rdquo;
Related Link: <a href="https://www.benzinga.com/trading-ideas/long-ideas/17/09/10037102/dont-forget-this-europe-etf">Don&#39;t Forget This Europe ETF</a>
<h3>Looking Inside</h3>
USMV follows the MSCI USA Minimum Volatility (USD) Index and holds 190 stocks. The ETF allocates over 38 percent of its combined weight to the healthcare and technology sectors. USMV&#39;s nearly 19 percent weight to the technology sector is perhaps surprising and undoubtedly large among low volatility strategies.
The rival SPLV has also been increasing its technology exposure to the point that the ETF&#39;s weight to that sector is currently the highest it has been in over six years on the market.
SPLV tracks an index that has no sector constraints and focuses on just stocks with the lowest 12-month volatility. SPLV is reconstituted on a quarterly basis, most recently in late August, said Rosenbluth. &ldquo;Financials (21 percent of assets), industrials (18 percent) and utilities (17 percent) were the largest sectors at the end of August, while exposure to technology (11 percent) and health care (5 percent) was much lighter than at peer USMV.&rdquo;
PLV tracks the S&amp;P 500 Low Volatility Index, which is home to the 100 S&amp;P 500 members that have the lowest trailing 12-month volatility. 
&ldquo;Since inception in 2011, the S&amp;P 500 Low Volatility Index exhibited a down-capture of 43% and actually rose in one of the 10 worst markets since 2011,&rdquo; <a href="https://www.invesco.com/portal/site/us/financial-professional/etfs/product-detail?productId=SPLV">according to PowerShares</a>.
SPLV also has mid- and small-cap equivalents that follow low volatility answers to the S&amp;P MidCap 400 Index and the S&amp;P SmallCap 600 Index.
Related Link: <a href="https://www.benzinga.com/trading-ideas/long-ideas/17/09/10037103/an-ideal-anti-dollar-play">An Anti-Dollar Play</a>

Evaluating Low Volatility ETFs

There may not be a cure for the summertime blues, but the exchange-traded funds industry is making things interesting with a spate of new product launches. Dispelling the notion that July is a slow, uneventful time on Wall Street, new ETF launches topped double digits last week.
Many of these new ETFs are <a href="https://www.benzinga.com/trading-ideas/long-ideas/17/07/9781292/new-thinking-in-a-small-cap-etf">smart beta funds</a>, a growing and increasingly competitive segment of the ETF universe. In fact, some new ETFs combine the concepts of smart beta and fixed income investing, a growing but still nascent concept in the ETF space.
&ldquo;CFRA thinks there are similarities to variations on existing themes in the broad suite of ETF launches last week: some will sound similar to existing products, while others are aiming to break new ground,&rdquo; said <a href="https://newpublic.cfraresearch.com/">CFRA Research</a> director of ETF &amp; Mutual Fund Research Todd Rosenbluth in a note out Wednesday. &ldquo;What&rsquo;s clear is these are not just variations of plain vanilla.&rdquo;
<h3>Enhanced Indexing</h3>
The PowerShares S&amp;P 500 Minimum Variance Portfolio (BATS: SPMV) is one of the newest additions to the equity-based smart beta fray. SPMV is based on the S&amp;P 500 Minimum Volatility Index, but offers some important differences relative to rivals such as the iShares Edge MSCI Min Vol USA ETF (NYSE: <a class="ticker" href="/stock/usmv#NYSE">USMV</a>) and the PowerShares S&amp;P 500 Low Volatility Portfolio (NYSE: <a class="ticker" href="/stock/splv#NYSE">SPLV</a>).
&ldquo;SPMV&rsquo;s approach has similarities to USMV in that it includes sector constraints, but it&rsquo;s done relative to the large-cap index,&rdquo; said Rosenbluth. &ldquo;In addition, semi-annual rebalance and reconstitution efforts are done at different times: February and August for the S&amp;P minimum volatility index vs. May and November for the MSCI index.&rdquo;
The new SPMV allocates over 34 percent of its combined weight to consumer discretionary and healthcare stocks.
<h3>Smart Beta Meets Bonds</h3>
Last week, iShares, the world&#39;s largest ETF issuer, introduced four new bond ETFs, including a pair rooted in smart beta methodologies. One of those two is the iShares Edge High Yield Defensive Bond ETF (BATS: HYDB).
As Rosenbluth noted, HYDB allocates more of its roster to B-rated bonds and less to CCC-rated issues than do the two largest, traditional junk bond ETFs. The new HYDB also features a lower expense ratio at 0.35 percent per year, or $35 on a $10,000 investment. HYDB has an effective duration of just over four years.
The new ETF holds 123 high-yield bonds and has $10 million in assets under management.
Related Links:
<a href="https://www.benzinga.com/trading-ideas/long-ideas/17/07/9776796/blackrock-bolsters-bond-etf-roster-with-esg-smart-beta-funds">New Bond ETFs From BlackRock</a>
<a href="https://www.benzinga.com/analyst-ratings/analyst-color/17/07/9791248/some-highly-rated-etfs-deliver-for-investors">ETF Ratings Matter</a>

Bonds

New ETFs Look To Separate Themselves

Exchange traded funds hauled in $135.5 billion in new assets in the first quarter, with investors displaying an overt preference for low-fee, international equity funds.
For example, the iShares Core MSCI Emerging Markets ETF (NYSE: <a class="ticker" href="/stock/iemg#NYSE">IEMG</a>), one of the least expensive emerging markets ETFs available to U.S. investors, was the top asset-gathering in the first three months of the year. On the other hand, investors departed some <a href="https://www.benzinga.com/trading-ideas/long-ideas/17/03/9239750/investors-pour-into-em-etfs-to-close-q1">once hot US-focused</a> strategies, including the iShares Edge MSCI Min Vol USA ETF (NYSE: <a class="ticker" href="/stock/usmv#NYSE">USMV</a>).
The iShares Core MSCI EAFE ETF (NYSE: <a class="ticker" href="/stock/iefa#NYSE">IEFA</a>), which charges 0.08 percent per, was another prolific asset gatherer in the first quarter. IEFA is one of the least expensive ex-US developed markets ETFs available and provides investors with cost-efficient exposure to the widely followed MSCI EAFE Index.
&ldquo;iShares MSCI Core Emerging Markets (IEMG) and iShares Core MSCI EAFE (IEFA) gathered $6.6 billion and $4.0 billion in the first quarter, amid demand for international equity exposure, particularly lower cost products. Both IEMG and IEFA trade with penny bid/ask spreads and have modest net expense ratios of $0.14 and $0.08, respectively, providing support for investor asset allocation needs,&rdquo; <a href="https://www.cfraresearch.com/">CFRA Research</a> said in a note out Tuesday.
Index brands also proved beneficial to ETF issuers as investors continued pouring money into ETFs tracking benchmarks <a href="https://www.benzinga.com/trading-ideas/long-ideas/17/02/9009334/etfs-are-big-business-for-index-providers">from well-known providers</a> such as Standard &amp; Poor&#39;s and MSCI Inc. (NYSE: <a class="ticker" href="/stock/msci#NYSE">MSCI</a>).
&ldquo;Aided by $9.4 billion of new money in March, iShares ETFs licensing an MSCI index gathered $21 billion in the first quarter, the most of the 20 largest ETF provider/index provider partnerships tracked by First Bridge Data. Yet the strong summary inflows mask some of the trends happening at iShares in 2017,&rdquo; CFRA said. &ldquo;iShares also benefitted from its partnership with the indices offered by the index division of S&amp;P Global, as these ETFs incurred $17 billion of net inflows.&rdquo;
In the first quarter, the iShares Core S&amp;P 500 ETF (NYSE: <a class="ticker" href="/stock/ivv#NYSE">IVV</a>) joined the SPDR S&amp;P 500 ETF (NYSE: <a class="ticker" href="/stock/spy#NYSE">SPY</a>) as the only ETFs with more than $100 billion in assets under management.
CFRA has overweight ratings on IEMG and IVV and a marketweight rating on IEFA.
The Vanguard FTSE Developed Markets ETF (NYSE: <a class="ticker" href="/stock/vea#NYSE">VEA</a>), a rival to IEFA, added $4.3 billion in the first quarter. VEA, which is also one of the cheapest ex-US developed markets ETFs, includes exposure to Canadian stocks, which IEFA does not.

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