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A More Tempered Global Equity Fund

By Patricia Oey

Low-volatility strategies, such as the iShares minimum volatility family of exchange-traded funds, can be attractive options for long-term investors. This is because these ETFs' underlying MSCI indexes generally exhibit less-dramatic declines in bear markets. Over the long term, these muted drawdowns explain much of the strategy’s outperformance versus its cap-weighted benchmark.

iShares MSCI All Country World Minimum Volatility (ACWV) tracks an index that is designed to be less volatile than its market-cap-weighted parent index--the MSCI All Country World Index (MSCI ACWI). Low-volatility strategies seek to exploit the observed phenomenon that portfolios with smaller price fluctuations tend to outperform portfolios with larger price fluctuations over the long term.

This strategy has had a good track record--as measured by the back-tested performance of this fund's benchmark index (the index's live performance commenced in November 2009). Over the trailing 15 and 10 years through Dec. 31, 2014, this fund's… Read More …