Looking for some safety amid all the uncertainty in the markets these days? A good exchange-traded fund (ETF) to consider right now is the iShares MSCI USA Min Vol Factor ETF (CBOE:USMV). The ETF invests in stocks which have low volatility, making it an ideal option for risk-averse investors.
There are 180 holdings in the fund, and it has averaged a beta of 0.70 over the past three years. Mirroring the market’s swings would be a beta of one, and the lower the number is, the less volatile the investment has been. This ETF has characteristics which would appeal to risk-averse investors. Not only is its beta low, but the well-diversified fund isn’t heavily dependent on any single stock; the largest holding only accounts for 1.6% of its overall portfolio. And with solid blue chip stocks including Walmart (NYSE:WMT), T-Mobile US (NASDAQ:TMUS), and Cisco Systems (NASDAQ:CSCO) among its top holdings, investors aren’t taking on much risk with this fund. One-quarter of the portfolio is in tech stocks, but financials (17%) and healthcare stocks (16%) also make up significant portions of the fund’s overall holdings.
In addition to stability, the ETF also offers an above-average yield of 1.6% -- that’s higher than the S&P 500 average of 1.3%.
Over the past five years, the fund has risen by around 60%, giving investors a good mix of dividends and solid returns. And its expense ratio of 0.15% is also relatively modest given the excellent diversification it offers and overall low-risk profile. This can be a great ETF to buy today, whether you’re worried about the year ahead or just want a no-nonsense investment you can hang on to for the long haul.
