The Low Volatility ETF Has Outperformed the S&P 500 Index

Yesterday SPLV made a new all-time high at $31.90 and it is up +15.39% on a total return basis YTD while SPY is up +10.15%. This shows that assuming higher risks by buying higher volatility has not paid off this year, at least up to this point. Conservative investors are the winners because they have provided the fuel for this market rally.


SPY is up +9.66% YTD and +10.15% YTD on a total return basis. It is also about 2.26% below its all-time high at $159.71 reached two weeks ago.


SPLV, the PowerShares S&P 500 Low Volatility ETF is up +15.29% YTD on a total return basis and just made an all-time high yesterday at $31.90 to close unchanged from the day before at $31.84.

Evidently, investing in the lower volatility stocks of the S&P 500 index has paid 50% more than in the underline, contrary to what financial economics predict. Or does this mean that eventually the spread will close in favor of risk takers? The market will provide the answer in the months to follow. But for now, conservative investors are profiting at the expense of risk takers.

Disclosure: no relevant position at the time of this post and no plans to initiate any positions within the next 72 hours..

Charting program: Amibroker (Charts created with AmiBroker – advanced charting and technical analysis software.”)


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