![]() ![]() ![]() For the most recent month-end performance, visit. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than the original cost. Outperformance verses the S&P 500 index does not indicate positive returns The performance quoted represents past performance and does not guarantee future results. A Down Market is defined as XUS having a negative return during the period. Returns since the common inception of XMU and XUS 04/10/13 – 3/13/20. Min Vol and S&P 500 ETF Performance during the Down Markets Min Vol ETF ( XMU)’s YTD excess returns vs the S&P 500 ETF ( XUS) have moved in lockstep with the spike in volatility (the “VIX” is a real-time market index that measures the implied volatility based near term options for the S&P 500 Index) Going into the bear market, incorporating minimum volatility has helped, it has outperformed the broader market by nearly 6%.Ĭhart 2: Minimum Volatility Continues to be Resilient ![]() The defensive nature of minimum volatility is designed to make today’s higher levels of volatility more tolerable. Minimum volatility is a strategy that seeks to reduce risk, and has historically delivered returns in-line with the market over the long run. For standardized returns and most recent month end performance, click each factor above. Current performance may differ from the performance shown. Investment return and principal value will fluctuate with market conditions and may be lower or higher when you sell your shares. Outperformance verses the S&P 500 index does not indicate positive returns Performance data represents past performance and does not guarantee future results. Small-Cap Index ETF ( XSMC), Momentum represented by the iShares Edge MSCI USA Momentum Factor Index ETF ( XMTM), Value represented by the iShares Edge MSCI USA Value Factor Index ETF ( XVLU), represented by the iShares Edge MSCI USA Quality Factor Index ETF ( XQLT). S&P 500 Index ETF represented by the iShares Core S&P 500 Index ETF ( XUS), Min Vol represented by the iShares Edge MSCI Min Vol USA Index ETF ( XMU), Size represented by the iShares S&P U.S. S&P 500 ETF in 2020 until the start of the bear market Factor Momentum has outperformed the broader marketĬhart 1: Excess Returns vs.Even in the midst of the market tumult, factors have been performing in-line with expectations and defensive factors-especially minimum volatility and quality-have provided some respite.įocusing our attention to 2020 performance until Thursday, Ma– the day we officially entered a bear market (defined as a 20% drawdown in the Dow from the previous high), there are three key themes evidenced by Chart 1 below: While we can’t always predict the duration of these dislocations, factors can help position your portfolio defensively so that over the long run, you stay invested. It’s important during these tough times to be patient, stay the course, and focus on your long-term financial objectives. Today’s market declines are harrowing and painful for all market participants. Going back further, the early 2000s recession was brought on by the bursting of the dot-com bubble and the unfortunate events of 9/11. In 2008, the Global Financial Crisis restructured the financial industry and changed the way we invest. Today, COVID-19, coinciding with record decreases in oil prices, have altered our daily lives and may have forever changed business practices. Momentum has also done well, showing its ability to outperform the broader market in both trending up and trending down markets.Ī generation in investments occurs roughly every 15 years, and at least once a generation we have events that change the course of business forever. Defensive factors-especially minimum volatility-have helped reduce risk. In the initial stage of this bear market however, we have seen factors behave as expected. Markets are whipsawing as the spread of COVID-19 cases has triggered unprecedented market volatility. ![]()
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