Wall Street has exhibited heightened volatility in recent weeks. Jerome Powell’s recent warnings about severe economic consequences of escalating tariffs have also heightened volatility. Low-volatility ETFs may look appealing in such an environment.
The momentum trade just hit a wall and the unwind has been nothing short of brutal. JPMorgan analysts Dubravko Lakos-Bujas, Arun Jain and Bhupinder Singh note that the sharp reversal in momentum has erased two years of gains in just three weeks – one of the fastest unwinds in four decades.
While plummeting stock indexes sent some investors screaming for the exits, others look to shift assets from large-cap tech stocks and cap-weighted ETFs into less volatile investments..
President Trump’s tariff plans as well as signs of economic slowdown have made investors jittery. Investors seeking to remain invested in the equity world may want to consider low-volatility ETFs. Here is a brief overview of some such funds.
These products could be worthwhile for low-risk-tolerance investors and have the potential to outperform the broader market, especially if volatility persists.
Runaway government spending, tensions in the Middle East, spikes in interest rates and oil prices - at what point do they become too much for the bull market?
Low-volatility ETFs have the potential to outpace the broader market in bearish conditions or an uncertain environment, providing significant protection to the portfolio.
