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Invesco Canada blog

Insights, commentary and investing expertise

Nick Kalivas

How has the low-volatility factor performed in recent markets – and why?


September 28, 2016
Subject | ETFs | Smart beta

Late summer has not been fruitful for the low-volatility factor. From July 6 to September 9, the S&P 500 Low Volatility Index has fallen by 4.67%, while the S&P 500 Index gained 1.70%.1 This is in sharp contrast to the second quarter, when the low-volatility index returned 6.75%, and the broad-market index returned 2.46%.1 Naturally, some investors are wondering what’s behind the shift.

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Potential for a smoother ride in all markets


March 16, 2016
Subject | ETFs | Smart beta

The trade-off between risk and return is central to modern portfolio theory. Finance textbooks teach that the more risk an investor assumes, the greater the expected return. This is not only academic, but intuitive to most people. Following this logic, one would expect lower volatility securities to generate lower returns over time, and higher volatility securities to deliver higher returns in exchange for added risk. But this may not necessarily be the case – at least within a given asset class.

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