FYI: With every bout of stock-market volatility, nervous investors start snapping up products meant to protect them in a downturn.
This round of swings is no exception: In the first four months of the year, funds that try to mitigate risk raised almost $10 billion, boosting assets to a record $77 billion, according to Morningstar Inc.
There was portfolio insurance before the 1987 Black Monday crash and bets on Wall Street’s fear gauge after the 2008 financial crisis. Now, two increasingly popular strategies are a type of so-called smart exchange-traded funds, which try to pick the least volatile stocks, and buffer funds, which limit losses using options.
Two of the biggest—the Invesco S&P 500 Low Volatility ETF SPLV 0.24% and BlackRock Inc.’s BLK 0.43% iShares Edge MSCI Min Vol USA ETF USMV 0.07% —have raised more than $6.4 billion combined so far this year, according to FactSet.
Regards,
Ted
https://www.wsj.com/articles/low-volatility-and-buffer-etfs-draw-billions-amid-jitters-over-market-swings-11559041201?mod=md_mf_news
