PowerShares S&P 500 Low Volatility
Low-volatility ETFs track indices featuring stocks that show more muted swings in their prices — the idea being that such stocks should fare better (or at least not dip as heavily as other companies) when the market swoons.
One popular low-vol ETF to consider is the PowerShares S&P 500 Low Volatility (NYSE:SPLV) fund. The portfolio consists of 100 stocks from the S&P 500 that have demonstrated low volatility over the past year.
Unsurprisingly, the fund is heaviest in utilities and consumer staples stocks — companies that provide things people need regardless of how good or bad the economy is. Top holdings, then, include consumer stocks such as Clorox (NYSE:CLX), General Mills (NYSE:GIS) and Johnson & Johnson (NYSE:JNJ), as well as power company Southern Co. (NYSE:SO).
Even with a focus on low volatility, the SPLV has matched the S&P 500 with roughly 13% gains over the past 52 weeks.
SPLV charges 0.25% in expenses and yields nearly 3% in dividends.