Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

2 Low-Volatility ETFs For Avoiding The Frenzy Of A Busy Earnings Week

By Investing.com (Tezcan Gecgil/Investing.com )ETFsOct 26, 2021 09:12
uk.investing.com/analysis/2-lowvolatility-etfs-for-avoiding-the-frenzy-of-a-busy-earnings-week-200500655
2 Low-Volatility ETFs For Avoiding The Frenzy Of A Busy Earnings Week
By Investing.com (Tezcan Gecgil/Investing.com )   |  Oct 26, 2021 09:12
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

Late October is usually a busy time. It's earnings season, and that typically means increased volatility for equities.

In the coming days, investors will see quarterly reports from a variety of big Wall Street names, including, Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL), Amazon (NASDAQ:AMZN), Apple (NASDAQ:AAPL), Boeing (NYSE:BA), eBay (NASDAQ:EBAY), General Electric (NYSE:GE), McDonald’s (NYSE:MCD), Microsoft (NASDAQ:MSFT), Texas Instruments (NASDAQ:TXN), and Twitter (NYSE:TWTR).

At the same time, traders are watching the CBOE Volatility Index, the benchmark for U.S. stock market volatility. The VIX is based on the S&P 500 Index, and shows traders’ expectation of the 30-day, forward-looking volatility, implied by the prices of S&P options.

The VIX is currently shy of 15.8. A month ago, it was well over 25. By comparison, in March 2020, in the early days of the pandemic, the VIX had surged to over 85.

Investors regard the index as a useful gauge of market sentiment, as the VIX spikes when the S&P 500 drops sharply. Foretelling what might be next for equities as well as for the CBOE Volatility Index is not always possible though.

However, readers who believe we might see increased choppiness in equity prices could research a number of low-volatility exchange-traded funds (ETFs). Today, we introduce two of these funds that could continue to see capital flows in the coming quarters.

1. SPDR SSGA US Large Cap Low Volatility Index ETF

  • Current Price: $143.08
  • 52-Week Range: $104.50 – $143.28
  • Dividend Yield: 1.98%
  • Expense Ratio: 0.12% per year

The SPDR® SSGA US Large Cap Low Volatility Index ETF (NYSE:LGLV) invests in U.S. equities that exhibit low volatility. The fund began trading in February 2013.

LGLV Weekly Chart.
LGLV Weekly Chart.

LGLV, which has 138 holdings, tracks the SSGA US Large Cap Low Volatility Index. The top 10 names make up about 15% of net assets, which stand at $449.4 million. Put another way, this is not a top-heavy fund, and wild price swings of individual stocks are limited. In terms of sub-sectors, we see industrials (17.36%) followed by financials (16.52%), information technology (13.89%) and real estate (12.15%).

Leading holdings include real estate investment trusts American Tower (NYSE:AMT), Public Storage (NYSE:PSA), Crown Castle International (NYSE:CCI), Prologis (NYSE:PLD), providers of environmental services Republic Services (NYSE:RSG), Waste Management (NYSE:WM), and electric utility group Dominion Energy (NYSE:D).

The fund returned 27.8% in the past 12 months and 19.2% in 2021. LGLV also hit a record high in recent days. P/E and P/B ratios are 25.95x and 4.05x. Interested readers might want to wait for a pullback toward $140.

2. Invesco S&P MidCap Low Volatility ETF

  • Current Price: $55.58
  • 52-Week Range: $41.19 – $55.82
  • Dividend Yield: 1.05%
  • Expense Ratio: 0.25% per year

The Invesco S&P MidCap Low Volatility ETF (NYSE:XMLV) invests in 81 mid-cap securities from the S&P MidCap 400 Index with the lowest realized volatility over the past 12 months. The index and the fund are rebalanced quarterly.

XMLV Weekly Chart.
XMLV Weekly Chart.

XMLV, which was first listed in February 2013, has net assets around $1.42 billion. The leading 10 stocks comprise around 15% of the fund. Industrials have the largest weighting, with 21.62%. Next in line are real estate (18.92%), utilities (13.89%), and materials (11.70%).

Among the top names are the producer of packaged bakery products Flowers Foods (NYSE:FLO), First Industrial Realty Trust (NYSE:FR), financial data platform FactSet Research Systems (NYSE:FDS), IT group CACI International (NYSE:CACI), which focuses on providing government intelligence and defense services, and specialty chemicals group RPM International (NYSE:RPM), known for its coatings and sealants.

XMLV is up 26.8% in the past year and 15.5% year-to-date. It hit an all-time high in early September. P/E and P/B ratios stand at 21.74x and 2.78x. Long-term investors could regard a potential decline toward the $53 level as a better entry point.

2 Low-Volatility ETFs For Avoiding The Frenzy Of A Busy Earnings Week
 

Related Articles

2 Low-Volatility ETFs For Avoiding The Frenzy Of A Busy Earnings Week

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Edith Gliku
Edith Gliku Oct 26, 2021 11:40
Saved. See Saved Items.
This comment has already been saved in your Saved Items
hello
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email