PowerShares S&P 500 Low Volatility Portfolio ETFNYSEARCA
Fri, Aug. 19, 12:54 PM
- As of the end of last month, low volatility ETFs have seen a full $13B of inflows this year, and over the last 12 months, the MSCI World Minimum Volatility Index has surged 13.3% vs. a 0.5% decline for the MSCI World Index.
- Thanks to pricier valuations for low vol names, SSgA head of research Dave Mazza suggests the next 12 months, not to mention the next three to five years, won't be as favorable. If you're buying low vol to help smooth out your portfolio's volatility for the long-term, that's fine, he says, but if you're looking for better returns than a broader index, you'll be disappointed.
- Commonwealth Financial Networks portfolio manager Peter Essele: "Every dollar that moves in [to low volatility] is becoming more and more exposed to overweighted securities that are trading well above long-term averages."
- ETFs: SPLV, USMV, EFAV, HDLV, IDLV, XMLV, XSLV, SMLV, LGLV, CFA, CDC, CFO, XRLV, LVHD, CIZ, CSF, OVLC, ONEV, FXEP, HEFV
Wed, Aug. 10, 1:17 PM
- "There are a lot of dumb ideas now masquerading as smart beta," says Rob Arnott. "My fear is that a potential crash that we hypothesized—in a few overvalued ‘smart beta’ strategies—may make the ‘smart beta’ label a subject of future jokes, and a chapter in the [Chartered Financial Analyst] program."
- Smart-beta ETFs have received record inflows over the past year, and the vast majority of new ETFs launched this year have been smart-beta products, according to ETFGI.
- Low-volatility ETFs have garnered $14.32B YTD, while value-oriented strategies have received $6.83B, and dividend-oriented $3.09B.
- Arnott: "Many of the most popular new factors and strategies have succeeded solely because they have become more and more expensive ... If valuations were to revert back to their historical levels, these recently popular strategies can bring terrible performance."
- Low-vol ETFs: SPLV, USMV, HDLV, XMLV, XSLV, SMLV, LGLV, CFA, CDC, CFO, XRLV, LVHD, CSF, OVLC, ONEV
Tue, Jul. 12, 11:44 AM
- That the valuations on these popular names are stretched isn't new news, but, putting numbers on it, JPMorgan's Dubravko Lakos-Bujas says prices are 30% above levels justified by profitability, and 10% above fair value based dividend growth.
- This can be resolved in one of two ways, he says: Either momentum stocks snap back, causing low-vol to lag, or the whole market turns lower. Either way, investors in USMV or SPLV, to name two, should take caution.
- Low-vol ETFs: SPLV, USMV, HDLV, XMLV, XSLV, SMLV, LGLV, CFA, CDC, CFO, XRLV, LVHD, CSF, OVLC, ONEV
Fri, Apr. 29, 3:03 PM
- Low volatility stocks are besting the broader averages this year, with the SPLV up 3% and the USMV up 4% vs. the 0.7% advance for the S&P 500.
- While the consumer staples that make up much of the low vol names are expected to do well in the rocky times seen in 2016, at 21x earnings, they're getting pricey.
- Picking through individual names though, Barclays' Jonathan Glionna has come up with a list of low volatility names which can still be deemed not expensive.
- In consumer staples: AutoZone (NYSE:AZO), Darden (NYSE:DRI), Time Warner Cable (NYSE:TWC), Clorox (NYSE:CLX), Coca-Cola (NYSE:KO), CVS, Hormel (NYSE:HRL), J.M. Smucker (NYSE:SJM).
- In utilities: Entergy (NYSE:ETR), PG&E (NYSE:PCG), PPL.
Tue, Mar. 15, 5:52 AM
- In a note this morning, analysts at Jefferies sound a bullish tone, noting that relative calm has returned to the high-yield debt market and money-flows are normalizing. In their words:
- "U.S. monetary conditions have loosened as the inflation rate has climbed and real rates have gone negative despite last year's rate hike. China's monetary conditions through the double whammy of a cut in the RRR and increased bank loan growth have further eased monetary conditions in the dollar bloc.
- "The drop in non-OPEC oil production (primarily led by the U.S.) and tentative verbal agreements amongst some OPEC members appears to have put a bottom in oil prices.
- "The bottom line is that the 'perfect storm' is passing and that a number of unrelated factors have caused monetary conditions to ease."
- Contrast Jefferies' view with that of Morgan Stanley, who said yesterday there's a 30% chance of a U.S. recession.
- ETFs: SPY, QQQ, DIA, SH, SSO, SDS, VOO, IVV, UPRO, SPXU, PSQ, TQQQ, SPXL, SPLV, RSP, SPXS, QID, SQQQ, PRF, QLD, CRF, DOG, DXD, UDOW, RWL, EPS, SDOW, VV, VFINX, USA, SCHX, DDM, IWB, OEF, ZF, SPHB, MGC, SPHQ, QQEW, QQQE, FEX, VONE
Thu, Mar. 10, 4:54 PM
- In a note this morning, Goldman does an about-face on its recent advice to buy S&P calls:
- "The recent relief rally might be short-lived, especially with oil prices now at the upper end of our commodities team's forecast range for 1H 2016.
- "We make no changes to our asset allocation at this stage as the relief rally has been too fast, in our view. We still do not feel comfortable taking more risk in equities until valuation or growth becomes more attractive.
- "Although we believe the market has been too pessimistic, we think a key driver of the relief has been higher oil prices. With oil at the upper end of our commodities team's forecast range for 1H 2016, it could drive further volatility as we do not believe oil weakness is necessarily over.
- March 9: Goldman: Don't bet on bond market convergence
- ETFs: SPY, QQQ, DIA, SH, SSO, SDS, VOO, IVV, UPRO, SPXU, PSQ, TQQQ, SPXL, SPLV, RSP, SPXS, QID, SQQQ, PRF, QLD, CRF, DOG, DXD, UDOW, RWL, EPS, SDOW, VV, VFINX, USA, SCHX, DDM, IWB, OEF, ZF, SPHB, MGC, SPHQ, QQEW, QQQE, FEX, VONE, JKD, XLG, SPLX, EEH
Thu, Mar. 10, 3:26 PM
- The iShares MSCI USA Minimum Volatility ETF (NYSEARCA:USMV) is this year's most popular stock ETF, garnering $2.8B of inflows.
- “A lot of people don’t believe in the rally,” says Pravit Chintawongvanich, from Macro Risk Advisors. "Lw volatility stocks are going to be things like utilities, consumer staples, telecoms, real estate investment trusts -- sectors that have outperformed."
- Checking the scorecard, USMV is higher by 1.8% this year, outperforming the S&P 500 410 basis points. On a year-over-year basis, USMV is doing better by about 760 basis points.
- Low-vol ETFs: SPLV, USMV, HDLV, XSLV, XMLV, SMLV, LGLV, CFA, CFO, CDC, CSF, LVHD
Wed, Jan. 13, 5:06 AM
- The SocGen strategist says the West is about to be hit by a wave of deflation from emerging market economies and that central banks were unaware of the disaster about to hit them.
- “I realize most people think I am talking utter garbage but I’m used to that. And maybe I am! But the truth will come out in the next recession which may be pretty close now,” Edwards says.
- “The previous bear market low was in March 2009 when the S&P reached 666. I think we’ll go below that within this bear market.
- “Developments in the global economy will push the U.S. back into recession. The financial crisis will reawaken. It will be every bit as bad as in 2008-09 and it will turn very ugly indeed.
- “Emerging market currencies are still in freefall. The U.S. corporate sector is being crushed by the appreciation of the dollar.
- He says the U.S. economy is in far worse shape than the Fed realizes: “We have seen massive credit expansion in the U.S. This is not for real economic activity; it is borrowing to finance share buybacks.”
- Edwards attacked the “incredible conceit” of central bankers, who had failed to learn the lessons of the housing bubble that led to the financial crisis and slump of 2008-09. “They didn’t understand the system then and they don’t understand how they are screwing up again. Deflation is upon us and the central banks can’t see it.”
- Note: Edwards's "Ice Age" thesis goes back to Aug. 2008, and was reiterated in Dec. 2009, Sept. 2011, and May 2012.
- ETFs: SPY, QQQ, DIA, SH, SSO, SDS, VOO, IVV, UPRO, PSQ, SPXU, TQQQ, SPXL, SPLV, RSP, SPXS, QID, PRF, SQQQ, QLD, CRF, DOG, DXD, RWL, UDOW, EPS, SDOW, VV, USA, SCHX, DDM, VFINX, IWB, OEF, ZF, SPHB, MGC, SPHQ, BXUB, QQEW, FEX, QQQE, VONE, XLG, JKD, EEH, SPLX, SFLA, BXUC, EQL, QQXT, ROLA, IWL, SPUU, ONEK, EQWL, EWRI, LGLV, ERW, EQAL, FWDD, FMK, ZLRG
Mon, Jan. 11, 4:38 AM
- JPM strategists note that earnings expectations have been managed aggressively going into earnings season. Four months ago, the "hurdle rate" for S&P 500 stocks was +5% Y/Y; now it's -4% Y/Y. “If this were to materialize, it would be the weakest quarter for EPS delivery so far in the upcycle.”
- Energy sector earnings consensus signals only single-digit losses, while oil prices are 36% below the 21015 average.
- Sees euro-zone earnings outperforming U.S. for second year running.
- Overall, firm says risk/reward for stocks is poor. Use bounces as selling opportunities.
- ETFs: SPY, QQQ, DIA, SH, XLE, SSO, SDS, VOO, IVV, VDE, UPRO, PSQ, SPXU, ERX, TQQQ, OIH, SPXL, SPLV, XOP, RSP, SPXS, QID, PRF, SQQQ, ERY, FCG, QLD, CRF, DOG, DIG, GASL, DXD, PBW, RWL, UDOW, EPS, DUG, SDOW, BGR, XES, IYE, VV, USA, IEO, SCHX, DDM, VFINX, IEZ, QCLN, FENY, PXE, IWB, OEF, PXI, ZF, FIF, PXJ, SPHB, MGC, SPHQ, PSCE, BXUB, NDP, RYE, QQEW, FEX, QQQE, VONE, XLG, JKD, FXN, EEH, SPLX, PUW, SFLA, BXUC, EQL, QQXT, DDG, ROLA, IWL, SPUU, ONEK, HECO, EQWL, EWRI, LGLV, ERW, FWDD, EQAL, ZLRG, FMK, CFA, SYE, CFO, LLSP, UDPIX, SBUS, USWD, USSD, DRIP, GUSH, OTPIX, QUS, RYARX, GSLC
Apr. 9, 2015, 1:33 PM
- The PowerShares S&P 500 ex-Rate Sensitive Low Volatility Portfolio (NYSEMKT:XRLV) takes the 100 stocks from the S&P 500 that feature low-volatility and are not sensitivity to interest rate changes.
- This fund takes the established theme of the PowerShares S&P 500 Low Volatility Portfolio (NYSEARCA:SPLV) to another level by including interest rate sensitivity as a requirement.
- Other low volatility ETFs: LGLV, CFO, CFA
Apr. 9, 2015, 9:16 AM
- Volatility in the PowerShares S&P 500 Low Volatility ETF (NYSEARCA:SPLV) has been higher than the S&P 500 each day since Feb. 27, according to Bloomberg, with the gap peaking at 244 basis points on March 18 - the widest since the ETF opened for business in 2011.
- “There’s no guarantee that the name of an ETF, the label, means it’s going to perform the way it’s advertised,” says Morningstar's Michael Rawson. “Investors need to know there’s no magic formula.”
- The SPLV holds the 100 stocks in the S&P 500 which have fluctuated the least over the prior 12 months. One reason for the high volatility of late, says Rawson, could be energy stocks - the SPLV owns none vs. the S&P's 8.24% weighting, and volatility in the energy names tumbled lower in March.
- Other low vol ETFs: SPLV, USMV, HDLV, XSLV, XMLV, SMLV, LGLV, CDC, CFO, CFA, CSF
Jul. 31, 2014, 11:04 AM
- The Compass EMP U.S. Discovery 500 Enhanced Volatility Weighted Fund (Pending:CSF) will include only companies with consistent positive earnings (at least its 4 most recent quarters) and is weighted based on the volatility of each stock.
- According to a regulatory filing, stocks with lower volatility receive a higher weighting, while stocks with higher volatility will receive a lower weighting in the fund.
- Earlier this month, Compass EMP launched its first three ETFs, all of which feature a volatility-targeting strategy and fall into the trendy "smart beta” umbrella.
- U.S. ETFs with a focus on volatility management: SPLV, USMV, XMLV, XSLV, SMLV, LGLV, CFA, CFO, CDC, CFA, CFO
Jul. 8, 2014, 12:26 PM
- Leading this week's decline are a lot of the same names which led March's "momo" selloff, among them the biotechs (XBI -4.5%) and social media (SOCL -4.4%). Also familiar, small caps (IWM -1.5%) are off more than the other major indexes.
- Doing their jobs are the low volatility ETFs like SPLV (SPLV) and USMV (USMV -0.2%), as well as defensive sectors like the utilities (XLU +0.6%).
- Raymond James' typically bullish Jeffrey Saut is out with a note calling for the first decent pullback of the year - a 10-12% decline - to commence later this month or early August, and he suggests investors begin raising cash.
- Biotech ETFs: XBI, BBH, FBT, PBE
- Low-vol ETFs: SPLV, LGLV, CFA, CFO
- Utility ETFs: XLU, IDU, VPU, UPW, FUTY, RYU, FXU, PUI, SDP, PSCU
Jul. 1, 2014, 12:40 PM
- Traditionally a mutual fund issuer, Compass EMP is striking out into the ETF industry with the creation of 3 smart beta funds, each tracking an index made by Compass EMP.
- The Compass EMP U.S. EQ Income 100 Enhanced Volatility Weighted Fund (CDC), Compass EMP U.S. 500 Volatility Weighted Index ETF (CFA), and Compass EMP U.S. 500 Enhanced Volatility Weighted Index ETF (CFO) will all begin trading on July 2nd.
- These funds all feature a focus on volatility management and will charge an expense ratio between 58 and 68 basis points.
- U.S. ETFs with a focus on volatility: SPLV, LGLV, USMV, VQT, PHDG, XSLV, SPXH, XMLV, SMLV, ERW, VIXH
Jun. 4, 2014, 12:49 PM
- The iShares MSCI ex-Japan Minimum Volatility ETF (AXJV), the iShares MSCI Europe Minimum Volatility ETF (EUMV), and the iShares MSCI Japan Minimum Volatility ETF (JPMV) will launch on June 5th .
- The three new offerings will offer "min vol" fans global exposure and join BlackRock's existing minimum volatility offering, the USA Minimum Volatility ETF (USMV).
- Other low volatility ETFs: SPLV, EEMV, USMV, EFAV, HILO, ACWV, EELV, IDLV, XSLV, XMLV, SMLV, LGLV
Jun. 3, 2014, 3:23 PM
- The three new offerings will offer "min vol" fans global exposure with the iShares MSCI ex-Japan Minimum Volatility ETF, the iShares MSCI Europe Minimum Volatility ETF, and the iShares MSCI Japan Minimum Volatility ETF.
- BlackRock's existing minimum volatility offerings include the USA Minimum Volatility ETF (USMV).
- ETFs: SPLV, USMV, EFAV, ACWV, IDLV, XSLV, XMLV, SMLV, LGLV