A new era for low volatility ETFs?

Why investors should consider low volatility ETFs once again

Edoardo Mezza

Edoardo Mezza

The first 23 years of this millennium have not been bad for international equity markets but have demanded an impressive resilience from investors. During the last decade, the S&P 500 delivered an annualised performance of 10.8%. Its volatility was 17.7% (Sharpe ratio 0.61).

Over this extended period, three major drawdowns occurred in 2018, 2020 and 2022 (see Figure 1). This highlights the issue of how to stay invested while minimising exposure to market volatility and the risk of sharp reversals...

Edoardo Mezza is senior director at Banca Patrimoni Sella & C.

This article first appeared in ETF Insider, ETF Stream's monthly ETF magazine for professional investors in Europe. To read the full article, click here.

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