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Sail Smoothly with This Smart Low-Volatility Fund

Volatility, the potential for the market or a stock to swerve sharply in value, serves as a deterrent for many prospective investors. After all, who wants to lose a sizable portion of hard-earned savings in a flash? Luckily for investors such as these, there exists a smart beta ETF designed specifically to offer a calmer approach: iShares MSCI USA Minimum Volatility (USMV).

USMV provides two layers of low-volatility protection. First, it follows an index composed of U.S. equities selected by their relatively low levels of volatility characteristics when compared to the broader market. Second, as a smart beta fund, USMV further weights its investment in each security of the index with regards to volatility to reduce risk even further.

The reduced-risk approach of this non-diversified fund has proven profitable this year, as USMV is up 7.35% since 2014 began. This ETF also offers a dividend yield of 2.22%.

Read more about this smart beta approach to low-volatility investing at Eagle Daily Investor.

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Volatility, the potential for the market or a stock to swerve sharply in value, serves as a deterrent for many prospective investors.

archive

Sail Smoothly with This Smart Low-Volatility Fund

Volatility, the potential for the market or a stock to swerve sharply in value, serves as a deterrent for many prospective investors.

Volatility, the potential for the market or a stock to swerve sharply in value, serves as a deterrent for many prospective investors. After all, who wants to lose a sizable portion of hard-earned savings in a flash? Luckily for investors such as these, there exists a smart beta ETF designed specifically to offer a calmer approach: iShares MSCI USA Minimum Volatility (USMV).

USMV provides two layers of low-volatility protection. First, it follows an index composed of U.S. equities selected by their relatively low levels of volatility characteristics when compared to the broader market. Second, as a smart beta fund, USMV further weights its investment in each security of the index with regards to volatility to reduce risk even further.

The reduced-risk approach of this non-diversified fund has proven profitable this year, as USMV is up 7.35% since 2014 began. This ETF also offers a dividend yield of 2.22%.

Read more about this smart beta approach to low-volatility investing at Eagle Daily Investor.

Newsletter Signup.

Sign up to the Human Events newsletter

Written By

Doug Fabian is the editor of Successful Investing and High Monthly Income, and is the host of the syndicated radio show, "Doug Fabian's Wealth Strategies." Taking over the reigns from his dad, Dick Fabian, back in 1992, Doug has continued to uphold the reputation of the newsletter as the #1 risk-adjusted market timer as ranked by Hulbert??s Investment Digest. For more than 30 years, Successful Investing (formerly the Telephone Switch Newsletter) has produced double-digit annual gains. Doug has become known for his expert knowledge and timely use of innovative tools like Exchange Traded Funds, bear funds and Enhanced Index funds to profit in any market climate.

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