4 Low-Volatility Stock Funds
These exchange-traded funds and one mutual fund will soothe your nerves while sticking with stocks.
New exchange-traded funds may be just the ticket for jittery investors. These ETFs invest in stocks that shimmy the least. The one we like best is PowerShares S&P 500 Low Volatility Portfolio (symbol SPLV). Standard & Poor’s takes the 100 least-volatile stocks in the S&P 500 index over the previous 12 months, weights them by volatility (the less volatile a stock, the bigger its position in the specialized index) and rebalances the holdings quarterly. Note that S&P bases volatility on standard deviation, not beta.
The ETF charges just 0.25% a year and uses the simplest methodology. Since its May 2011 launch, it has garnered $1.7 billion in assets and is by far the most liquid and easily traded of the new class of ETFs. True to its low-volatility nature, its returns lagged early in 2012. Through April 5, the ETF gained 3.9%, compared with 11.8% for the S&P 500. Top holdings include utility Southern Company, Procter & Gamble and Coca-Cola.
Competing funds include the Russell 1000 Low Volatility ETF (LVOL) and iShares MSCI USA Minimum Volatility Index Fund (USMV). There are low-volatility ETF options for both developed and emerging markets as well.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Some actively run mutual funds tend to gravitate toward low-volatility stocks. Our favorite is Vanguard Dividend Growth (VDIGX), a member of the Kiplinger 25. It also lagged the market early in 2012, with a year-to-date gain of 6.9%. But its long-term record is superb.
ORDER NOW: Buy Kiplinger’s Mutual Funds 2012 special issue for in-depth guidance on the only investments you need.
-
Retirees in These 7 States Could Pay Less Property Taxes Next YearState Taxes Retirement property tax bills could be up to 65% cheaper for some older adults in 2026. Do you qualify?
-
Estate Tax Quiz: Can You Pass the Test on the 40% Federal Rate?Quiz How well do you know the new 2026 IRS rules for wealth transfer and the specific tax brackets that affect your heirs? Let's find out!
-
'The 'Mamdani Effect' in New York: Can the City Afford a Millionaire Tax?State Tax Will higher income taxes drive the wealthy to flee New York in 2026?
-
Nasdaq Sinks 418 Points as Tech Chills: Stock Market TodayInvestors, traders and speculators are growing cooler to the AI revolution as winter approaches.
-
Stocks Chop as the Unemployment Rate Jumps: Stock Market TodayNovember job growth was stronger than expected, but sharp losses in October and a rising unemployment rate are worrying market participants.
-
Stocks Struggle Ahead of November Jobs Report: Stock Market TodayOracle and Broadcom continued to fall, while market participants looked ahead to Tuesday's jobs report.
-
AI Stocks Lead Nasdaq's 398-Point Nosedive: Stock Market TodayThe major stock market indexes do not yet reflect the bullish tendencies of sector rotation and broadening participation.
-
Dow Adds 646 Points, Hits New Highs: Stock Market TodayIt was "boom" for the Dow but "bust" for the Nasdaq following a December Fed meeting that was less hawkish than expected.
-
Dow Rises 497 Points on December Rate Cut: Stock Market TodayThe basic questions for market participants and policymakers remain the same after a widely expected Fed rate cut.
-
JPMorgan's Drop Drags on the Dow: Stock Market TodaySmall-cap stocks outperformed Tuesday on expectations that the Fed will cut interest rates on Wednesday.
-
Stocks Slip to Start Fed Week: Stock Market TodayWhile a rate cut is widely expected this week, uncertainty is building around the Fed's future plans for monetary policy.
