We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
The Zacks Analyst Blog Highlights SPHD, LGLV, SPLV, USMV and XMLV
Read MoreHide Full Article
For Immediate Release
Chicago, IL – August 16, 2024 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. ETFs recently featured in the blog include: Invesco S&P 500 High Dividend Low Volatility ETF (SPHD - Free Report) , SPDR SSGA US Large Cap Low Volatility Index ETF (LGLV - Free Report) , Invesco S&P 500 Low Volatility ETF (SPLV - Free Report) , iShares MSCI USA Min Vol Factor ETF (USMV - Free Report) and Invesco S&P MidCap Low Volatility ETF (XMLV - Free Report) .
Here are highlights from Thursday’s Analyst Blog:
Low-Volatility ETFs Shining Halfway Through Q3
After a strong first half, Wall Street lost momentum at the start of the third quarter, triggered by recession worries and overvaluation concerns in the tech sector, which was investors' darling and led the market higher this year. This has resulted in higher demand for low-volatility products, with several ETFs outperforming the broader market halfway through the third quarter.
We have highlighted five ETFs from the space that have outpaced the S&P 500, which lost 4.1% in a month.
Low-volatility ETFs have the potential to outpace the broader market in bearish conditions or in an uncertain environment, providing significant protection to the portfolio. This is because 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 (read: Market Anxiety? Protect Your Portfolio with Zero-Loss ETFs).
Low-Volatility in Trend
Traders are betting that the U.S. economy has lost steam and is on the verge of sliding toward a recession, given rising unemployment, high interest rates and fading confidence in the tech sector.
The labor market cooled in July as the economy added 114,000 jobs, 35% fewer than expected. Unemployment rose from 4.1% to 4.3%, the highest since October 2021, and represented the fourth consecutive monthly increase. The data prompted concerns about a recession. Another batch of data from the Institute for Supply Management indicates slowdown worries. Manufacturing activity fell in July, marking the fourth straight month of contraction.
Additionally, concerns that big technology companies' shares, particularly those investing heavily in artificial intelligence (AI), have been overvalued led to massive sell-offs in early August. Further, geopolitical tensions and the looming November elections also made investors jittery.
Per the CME Fedwatch Tool, the majority of traders now expect the Fed to pursue a 50 bps interest rate cut next month. Lower interest rates generally lead to reduced borrowing costs, which help businesses expand their operations more easily, resulting in increased profitability. This, in turn, stimulates economic growth and provides a boost to the stock market (read: Rate Cut in the Cards? ETFs to Play).
Given the prospect of rate cuts and heightened volatility, investors are currently seeking low-volatility ETFs.
ETFs in Focus
Invesco S&P 500 High Dividend Low Volatility ETF – Up 4.7%
Invesco S&P 500 High Dividend Low Volatility ETF offers exposure to 51 stocks traded on the S&P 500 Index that historically have provided high dividend yields and low volatility. It follows the S&P 500 Low Volatility High Dividend Index. Invesco S&P 500 High Dividend Low Volatility ETF is widely spread across sectors, with utilities, consumer staples, real estate and healthcare receiving double-digit exposure each.
Invesco S&P 500 High Dividend Low Volatility ETF has amassed $3.3 billion and charges 30 bps in annual fees. The fund trades in an average daily volume of 509,000 shares and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook (read: 5 Dividend ETFs Crushing the Market).
SPDR SSGA US Large Cap Low Volatility Index ETF – Up 3.1%
SPDR SSGA US Large Cap Low Volatility Index ETF follows the SSGA US Large Cap Low Volatility Index, which utilizes a rules-based process that seeks to increase exposure to stocks that exhibit low volatility. It holds 162 stocks in its basket, with key holdings in financials, industrials, real estate and utilities.
With AUM of $738.8 million, SPDR SSGA US Large Cap Low Volatility Index ETF charges 12 bps in annual fees and trades in an average daily volume of about 20,000 shares.
Invesco S&P 500 Low Volatility ETF – Up 2.6%
Invesco S&P 500 Low Volatility 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 102 securities in its basket. Invesco S&P 500 Low Volatility ETF is widely spread across sectors, with financials, consumer staples, industrials, and utilities receiving double-digit exposure each.
Invesco S&P 500 Low Volatility ETF has amassed $7.2 billion in its asset base and trades in a solid volume of around 1.4 million shares a day on average. It charges 25 bps in annual fees and has a Zacks ETF Rank #3 with a Medium risk outlook.
iShares MSCI USA Min Vol Factor ETF – Up 2%
iShares MSCI USA Min Vol Factor ETF offers exposure to stocks that have lower volatility characteristics relative to the broader U.S. equity market by tracking the MSCI USA Minimum Volatility Index. It holds 170 stocks in its basket, with none accounting for more than 1.7% of the assets. Information technology takes the top spot at 24.8%, while healthcare, financials, and consumer staples round off the next three spots.
With AUM of $24.3 billion, iShares MSCI USA Min Vol Factor ETF charges 15 bps in annual fees and trades in a solid average daily volume of 2 million shares. USMV has a Zacks ETF Rank #3 with a Medium risk outlook.
Invesco S&P MidCap Low Volatility ETF – Up 2%
Invesco S&P MidCap Low Volatility ETF offers exposure to the mid-cap securities from the S&P MidCap 400 Index with the lowest-realized volatility over the past 12 months. It follows the S&P MidCap 400 Low Volatility Index and holds 81 securities in its basket. Invesco S&P MidCap Low Volatility ETF is widely spread across sectors, with financials, real estate, industrials, and utilities receiving double-digit exposure each.
Invesco S&P MidCap Low Volatility ETF has AUM of $808.4 million and charges 25 bps in annual fees. XMLV trades in an average daily volume of about 50,000 shares.
Bottom Line
These products could be worthwhile for low-risk-tolerance investors and have more potential to outperform the broad market, especially if market volatility persists.
Want key ETF info delivered straight to your inbox?
Zacks' free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Shutterstock
The Zacks Analyst Blog Highlights SPHD, LGLV, SPLV, USMV and XMLV
For Immediate Release
Chicago, IL – August 16, 2024 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. ETFs recently featured in the blog include: Invesco S&P 500 High Dividend Low Volatility ETF (SPHD - Free Report) , SPDR SSGA US Large Cap Low Volatility Index ETF (LGLV - Free Report) , Invesco S&P 500 Low Volatility ETF (SPLV - Free Report) , iShares MSCI USA Min Vol Factor ETF (USMV - Free Report) and Invesco S&P MidCap Low Volatility ETF (XMLV - Free Report) .
Here are highlights from Thursday’s Analyst Blog:
Low-Volatility ETFs Shining Halfway Through Q3
After a strong first half, Wall Street lost momentum at the start of the third quarter, triggered by recession worries and overvaluation concerns in the tech sector, which was investors' darling and led the market higher this year. This has resulted in higher demand for low-volatility products, with several ETFs outperforming the broader market halfway through the third quarter.
We have highlighted five ETFs from the space that have outpaced the S&P 500, which lost 4.1% in a month.
Low-volatility ETFs have the potential to outpace the broader market in bearish conditions or in an uncertain environment, providing significant protection to the portfolio. This is because 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 (read: Market Anxiety? Protect Your Portfolio with Zero-Loss ETFs).
Low-Volatility in Trend
Traders are betting that the U.S. economy has lost steam and is on the verge of sliding toward a recession, given rising unemployment, high interest rates and fading confidence in the tech sector.
The labor market cooled in July as the economy added 114,000 jobs, 35% fewer than expected. Unemployment rose from 4.1% to 4.3%, the highest since October 2021, and represented the fourth consecutive monthly increase. The data prompted concerns about a recession. Another batch of data from the Institute for Supply Management indicates slowdown worries. Manufacturing activity fell in July, marking the fourth straight month of contraction.
Additionally, concerns that big technology companies' shares, particularly those investing heavily in artificial intelligence (AI), have been overvalued led to massive sell-offs in early August. Further, geopolitical tensions and the looming November elections also made investors jittery.
Per the CME Fedwatch Tool, the majority of traders now expect the Fed to pursue a 50 bps interest rate cut next month. Lower interest rates generally lead to reduced borrowing costs, which help businesses expand their operations more easily, resulting in increased profitability. This, in turn, stimulates economic growth and provides a boost to the stock market (read: Rate Cut in the Cards? ETFs to Play).
Given the prospect of rate cuts and heightened volatility, investors are currently seeking low-volatility ETFs.
ETFs in Focus
Invesco S&P 500 High Dividend Low Volatility ETF – Up 4.7%
Invesco S&P 500 High Dividend Low Volatility ETF offers exposure to 51 stocks traded on the S&P 500 Index that historically have provided high dividend yields and low volatility. It follows the S&P 500 Low Volatility High Dividend Index. Invesco S&P 500 High Dividend Low Volatility ETF is widely spread across sectors, with utilities, consumer staples, real estate and healthcare receiving double-digit exposure each.
Invesco S&P 500 High Dividend Low Volatility ETF has amassed $3.3 billion and charges 30 bps in annual fees. The fund trades in an average daily volume of 509,000 shares and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook (read: 5 Dividend ETFs Crushing the Market).
SPDR SSGA US Large Cap Low Volatility Index ETF – Up 3.1%
SPDR SSGA US Large Cap Low Volatility Index ETF follows the SSGA US Large Cap Low Volatility Index, which utilizes a rules-based process that seeks to increase exposure to stocks that exhibit low volatility. It holds 162 stocks in its basket, with key holdings in financials, industrials, real estate and utilities.
With AUM of $738.8 million, SPDR SSGA US Large Cap Low Volatility Index ETF charges 12 bps in annual fees and trades in an average daily volume of about 20,000 shares.
Invesco S&P 500 Low Volatility ETF – Up 2.6%
Invesco S&P 500 Low Volatility 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 102 securities in its basket. Invesco S&P 500 Low Volatility ETF is widely spread across sectors, with financials, consumer staples, industrials, and utilities receiving double-digit exposure each.
Invesco S&P 500 Low Volatility ETF has amassed $7.2 billion in its asset base and trades in a solid volume of around 1.4 million shares a day on average. It charges 25 bps in annual fees and has a Zacks ETF Rank #3 with a Medium risk outlook.
iShares MSCI USA Min Vol Factor ETF – Up 2%
iShares MSCI USA Min Vol Factor ETF offers exposure to stocks that have lower volatility characteristics relative to the broader U.S. equity market by tracking the MSCI USA Minimum Volatility Index. It holds 170 stocks in its basket, with none accounting for more than 1.7% of the assets. Information technology takes the top spot at 24.8%, while healthcare, financials, and consumer staples round off the next three spots.
With AUM of $24.3 billion, iShares MSCI USA Min Vol Factor ETF charges 15 bps in annual fees and trades in a solid average daily volume of 2 million shares. USMV has a Zacks ETF Rank #3 with a Medium risk outlook.
Invesco S&P MidCap Low Volatility ETF – Up 2%
Invesco S&P MidCap Low Volatility ETF offers exposure to the mid-cap securities from the S&P MidCap 400 Index with the lowest-realized volatility over the past 12 months. It follows the S&P MidCap 400 Low Volatility Index and holds 81 securities in its basket. Invesco S&P MidCap Low Volatility ETF is widely spread across sectors, with financials, real estate, industrials, and utilities receiving double-digit exposure each.
Invesco S&P MidCap Low Volatility ETF has AUM of $808.4 million and charges 25 bps in annual fees. XMLV trades in an average daily volume of about 50,000 shares.
Bottom Line
These products could be worthwhile for low-risk-tolerance investors and have more potential to outperform the broad market, especially if market volatility persists.
Want key ETF info delivered straight to your inbox?
Zacks' free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.
Get it free >>
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com
https://www.zacks.com
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.