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Anyone happy with "low volatility funds" like USMV?

#1
I briefly tried out USMV and a couple other supposedly low-volatility ETFs when I started anticipating a downturn this Spring. However I was disappointed with how they performed, it seemed they dropped just as much as growth funds like IVW, but didn't recover nearly as quickly, as you can see in the YTD comparison of IVW and USMV below.  YTD after a couple of corrections, IVW has yielded 9.5% whereas USMV is about half that at 4.85%. Has anyone had longer experience with funds like these? Are there scenarios where they make more sense?
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#2
Low vol. is for less pain, Not pain free. I have no pain at all with all in. in QYLD. I get my monthly check rain or shine. 9.5 % before tax . At 71 growth is not that critical. I want the account to be at 0 in 20 years. My other plan was the bucket system. but for simplicity QYLD can't be beat.
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#3
"USMV is a custom-weighted, non-leveraged, enhanced strategy equity ETF....."
 
I always LIKE the idea of these (and other) types of funds. The enhanced part means they can use options
 
"The investment seeks the investment results of the MSCI USA Minimum Volatility (USD) Index. The fund will invest at least 90% of its assets in the component securities of the index and may invest up to 10% of its assets in certain futures- options and swap contracts- cash and cash equivalents...."
 
Looks like most ETF's it's a mixed bag of holdings - I have not dug into what the actual options are........and more more importantly how successful they have been/are/will be

The problem is they probably aren't all that great, and we never really get a transparent view of the process. Just the output.
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#4
(11-22-2018, 12:29 AM)CCCA Wrote: "USMV is a custom-weighted, non-leveraged, enhanced strategy equity ETF....."
 
I always LIKE the idea of these (and other) types of funds. The enhanced part means they can use options
 
"The investment seeks the investment results of the MSCI USA Minimum Volatility (USD) Index. The fund will invest at least 90% of its assets in the component securities of the index and may invest up to 10% of its assets in certain futures- options and swap contracts- cash and cash equivalents...."
 
Looks like most ETF's it's a mixed bag of holdings - I have not dug into what the actual options are........and more more importantly how successful they have been/are/will be

The problem is they probably aren't all that great, and we never really get a transparent view of the process. Just the output.

I agree with the your statement.
 
The problem is they probably aren't all that great, and we never really get a transparent view of the process. Just the output.
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#5
I was not familiar with USMV, so I took a look at it. It wouldn't be a buy for me, but I don't dislike the top holdings. In fact, of the top ten holdings in USMV, I own shares of five of their top ten. In the top 20 I have eleven of the mix USMV holds. I prefer my own "low volatility" approach. The last two weeks my "volatility" versus the volatility of the major indexes was far less. I didn't drop anywhere near as fast as the S&P 500 - nor did I rise as quickly either. I think the reasons are two-fold:

1. I am focused on value and dividend growth.

2. I have a higher mix of investments in stocks that many investors just hold simply because they have a long term perspective.

The expense ratio for USMV is good, but the dividend yield is a bit weak. I realize the following are not labeled as "low volatility", but I would be more inclined to invest in SPY, VOO or IVV. But I don't hold these either. :-)

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