Markets

iShares min vol ETFs: passing the five-year test

RuthBlack / Shutterstock
RuthBlack / Shutterstock

iShares minimum volatility ETFs were thrown into a formidable proving ground when the first four were launched in 2011. For the past five years, global growth concerns and unforeseen events like Brexit have fueled turbulent markets that have repeatedly tested the ability of minimum volatility ETFs to reduce risk. Because iShares minimum volatility ETFs are designed to reduce risk over the long term, the fifth birthday of these four min vol ETFs is the right time to evaluate how they have fared for investors and to revisit some benefits they can offer. The five-year-old ETFs are: iShares Edge MSCI Min Vol USA ( USMV ), iShares Edge MSCI Min Vol EAFE ETF ( EFAV ), iShares Edge MSCI Min Vol Emerging Markets ( EEMV ) and iShares Edge MSCI Min Vol Global ( ACWV ). Here are five key points investors should consider about these five-year-old ETFs:

1. Delivered market-like returns, but with less risk than the overall market

2. Attractive risk-adjusted returns versus other funds

risk-adjusted returns

3. Potentially helps investors stay invested long term

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Past performance does not guarantee future results. For standardized performance, click here .

4.Can be used a portfolio building blocks

MSCI indexes

5. These ETFs are older than they seem

low volatility anomaly 1 Morningstar, as of 10/14/2016. Returns based on fund and index returns; risk based on standard deviation from 10/18/2011 - 10/14/2016. Past performance does not guarantee future results. 2 Morningstar, as of 10/14/2016. As measured by The Sharpe Ratio, industry standard for calculating risk-adjusted returns. Past performance does not guarantee future results. 3 Haugen and Heins (1975). Sara Shores is Global Head of Smart Beta for BlackRock and a regular contributor to The Blog .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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