ETF Insights

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Volatility

“I like equities but want to avoid high volatility and imbalances in my portfolio.”

Volatility

“Low volatility” strategies focus on companies whose stock market price has been relatively stable in the past. Paradoxically, such low volatility stocks tend to outperform high volatility stocks. This is known as “the low volatility anomaly,” as it contradicts the conventional wisdom that higher risk is rewarded with higher return. In periods of market uncertainty low volatility stocks can be in particular demand, contributing to their robust performance.