2024-05-22 17:59:47 ET
Summary
- SPLV is one of the most established U.S. large-cap low-volatility ETFs on the market. It has a moderate 0.25% expense and $7.10 billion in assets under management.
- The ETF appeals to risk-averse investors by selecting the 100 least-volatile S&P 500 Index stocks each quarter. Currently, SPLV overweights Financials, Consumer Staples, and Industrials.
- SPLV's current portfolio has a 0.75 five-year beta, the eighth-lowest among all large-cap blend ETFs. Unfortunately, it lacks appropriate quality, leaving investors vulnerable in "flight to safety" environments.
- As a result, I've assigned SPLV a neutral "hold" rating, and will highlight a higher-quality alternative I think you should consider.
Investment Thesis
On October 7, 2023, I recommended that readers avoid the Invesco S&P 500 Low Volatility ETF ( SPLV ) and suggested that the iShares MSCI USA Min Vol Factor ETF ( USMV ) was a suitable alternative. Since that article was published, SPLV has lagged behind USMV by 2.24% (14.60% vs. 16.84%) on total returns, continuing its lengthy streak of underperforming its peers. While past performance does not predict future results, SPLV's track record suggests potential problems with the strategy....
Read the full article on Seeking Alpha
For further details see:
SPLV: Think Twice Before You Buy This Low Volatility ETF