Lower Risk, Potentially Higher Returns

Low Volatility.  A New Type of Fund.

It's not often that you get to "have your cake and eat it too."  In some respects, that's exactly what's happening with low volatility investment funds.  

Here's how they work.  Over $3.6 trillion of investments track the S&P 500.  Instead of investing in the entire index of 500 stocks, low volatility funds like SPLV, an ETF, select 100 of the least volatile stocks in the index.  

In doing so, SPLV has smaller price swings since it's comprised of less volatile stocks.  When the S&P 500 index goes up in value, SPLV captures 70-80% of the up move.  However, when the index goes down, SPLV only captures 40-50% of the down move.  Over long periods, this results in funds like SPLV outperforming the index: 

Shown another way, low volatility funds can produce higher returns with lower risk:

If stocks went up in value all the time, the index with it's more volatile stocks would outperform the alternative low volatility fund, but stocks don't go up all the time!

Low volatility funds are ideal for investors who want to stay invested, protect against downside, and potentially generate higher long-term returns. It's important to remember that all investments, including low volatility funds, are subject to risk and, therefore, potential loss.

 Get your copy of "How Successful Couples Build Wealth."

________________________________________________________________________________________________________________________________________________________________________________________________________

About Linden Wealth Management

As a fiduciary and fee-only advisor, I don't make money by selling financial products.  I'm free to recommend the strategies and investments that make sense for couples and individuals, based on a clear understanding of where you're heading in life.

Questions?  Please reach out to me via my email with any questions that you might have.

Need more information?  Visit my website!

*This content is developed from sources believed to be providing accurate information. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their tax or legal counsel. Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel. Neither the information presented nor any opinion expressed constitutes a representation by us of a specific investment or the purchase or sale of any securities. Asset allocation and diversification do not ensure a profit or protect against loss in declining markets.