Is it the Right Time to Invest in Minimum Volatility ETFs?

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The coronavirus continues to spread across the United States, with at least 1.5 million cases confirmed and the death toll rising to more than 94,000, according to Johns Hopkins University. However, almost all U.S. states have begun the process of reopening and easing of social distancing norms.

The outbreak has caused an unprecedented collapse of economic activities as governments are forced to shut down commerce and implement social distancing measures in an effort to contain the spread of the virus. The job market is also getting disrupted as Americans are consistently filing claims for unemployment benefits. Going by the latest Labor Department report, additional 2.4 million people filed for unemployment benefits in the last week, bringing the total number of filings during the coronavirus outbreak to more than 38 million, per a CNBC article. Also, touching the highest level on record, the number of continuing claims stands at 25.07 million.

Investors also seem to be worried about the simmering U.S.-China tensions. Amid arguments with China regarding its role in controlling the coronavirus pandemic, this time the tussle is about China’s move to impose new national-security laws on Hong Kong, per a MarketWatch report. In this regard,  lawmakers in the United States have approved a bill with the aim to censure China’s latest move. Moreover, the Senate has passed a separate legislation that could result in Chinese companies being barred from listing on U.S. stock exchanges, per a Bloomberg report.

Minimum Volatility ETFs for a Healthy Portfolio

Low-volatility products could be intriguing choices for those who want to stay invested in equities during turbulent market conditions. The following options are intriguing:

iShares Edge MSCI Min Vol USA ETF USMV

This fund offers exposure to 209 U.S. stocks with lower volatility characteristics than the broader U.S. equity market by tracking the MSCI USA Minimum Volatility Index. With AUM of $33.43 billion, the product charges 0.15% in expense ratio. It has a Zacks ETF Rank #3 (Hold), with a Medium risk outlook (read: 5 Low-Volatility ETFs to Fight Second Wave of Virus Threat).

iShares Edge MSCI Min Vol EAFE ETF EFAV

EFAV seeks to track the investment results of an index composed of developed market equities that, in the aggregate, have lower volatility characteristics relative to the broader developed equity markets, excluding the U.S. and Canada. The fund tracks the MSCI EAFE Minimum Volatility (USD) Index and holds 280 securities. It has amassed $10.40 billion in its asset base. EFAV charges 20 bps in annual fees and has a Zacks ETF Rank #3, with a Low risk outlook (read: Try These Global Low-Volatility ETFs on Rising Recession Scares).

Invesco S&P 500 Low Volatility ETF SPLV

This ETF provides exposure to stocks with the lowest realized volatility over the past 12 months. It tracks the S&P 500 Low Volatility Index and holds 100 securities in its basket. SPLV has amassed $8.53 billion in its asset base. It charges 25 bps in annual fees and has a Zacks ETF Rank #3, with a Medium risk outlook (read: Try These ETFs to Counter the Coronavirus-Induced Volatility).

iShares Edge MSCI Min Vol Global ETF ACWV

The fund provides exposure to global stocks with potentially less risk. The fund tracks the MSCI All Country World Minimum Volatility Index and holds 445 securities. It has AUM of $5.48 billion and charges 20 bps in annual fees. ACWV has a Low risk outlook.

Invesco S&P 500 High Dividend Low Volatility ETF SPHD

The fund seeks investment results that generally correspond (before fees and expenses) to the price and yield of the S&P 500 Low Volatility High Dividend Index. It holds 50 securities. The fund has AUM of $2.39 billion and charges 30 bps in annual fees. It has a Medium risk outlook.

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iShares Edge MSCI Min Vol USA ETF (USMV): ETF Research Reports
 
Invesco SP 500 High Dividend Low Volatility ETF (SPHD): ETF Research Reports
 
iShares Edge MSCI Min Vol EAFE ETF (EFAV): ETF Research Reports
 
iShares Edge MSCI Min Vol Global ETF (ACWV): ETF Research Reports
 
Invesco SP 500 Low Volatility ETF (SPLV): ETF Research Reports
 
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