Investing factors that work over time typically do so for one of two reasons: they either produce an excess return by taking on additional risk or they benefit from the…
Tag: Low volatility stocks
Swedroe: New Findings on the Low-Risk Anomaly
New research on the low-risk anomaly—in which less risky stocks earn higher risk-adjusted returns—shows “exactly which types of stocks are likely to perform poorly over time, especially in a bear…
Long Term Compounding Using Low Volatility & Other Fundamental Factors
By Justin J. Carbonneau (@jjcarbonneau) — There is an age-old concept in investing that the more risk you take the higher the return you should get. This makes a lot…
Low-Volatility Stocks May Have a Dark Side
Although low-volatility stocks were very appealing in the wake of the financial crisis (assets under management have risen to approximately $46 billion since then), some argue that these stocks are…
Boring Stocks are Winning
For emerging-market and European equity investors, low-volatility stocks are “paying off by the most in two years,” according to a recent Bloomberg article. “Low volatility—sorting stocks based on the magnitude of…
The Most Expensive Investing Factor
By Jack Forehand, CFA (@practicalquant) — Factor investing is a long-term pursuit. Successfully following a factor-based approach is a function of studying what works over time, implementing it in a…
Interest Rate Sensitivity and Low-Vol Investing
Interest rates have a significant impact on security prices, according to an article by Morningstar’s Alex Bryan, CFA, the firm’s Director of Passive Strategies Research, North America. Bryan writes that,…
What Rising Rates Mean to Low-Vol Investors
“Confusing risk with volatility can be dangerous,” says a recent report by Greenline Partners, as it “can lead to seeing things that do not exist.” This according to an article…
The Irony of the Low-Volatility Binge
Investor appetite for low-volatility mutual and exchange-traded funds isn’t new. However, it seems to be reaching the point of gluttony. Bloomberg reports that this month, (for the first time), combined assets in the PowerShares S&P…
Popularity and Price Increase for "Low Vol" Funds
“Low volatility” funds have surged in popularity recently as investors have poured nearly $10 billion into them so far in 2016, which has significantly increased their price. At the end…