CHAPTER 19LOW-VOLATILITY AND HIGH-BETA ETFs

In the past, individual investors and financial advisors have not had sophisticated tools to manage volatility. They have often reacted to equity market volatility by moving into cash and bonds, frequently resulting in poor market timing and reducing long-term returns. The availability of volatility-based index products gives retail investors and advisors the opportunity to reframe their investment approach toward volatility.

There are two kinds of ETPs that often get grouped together under the “volatility” label. They are, however, very different categories of investment products, and it is very important for investors to be aware of these differences.

Equity-based low-volatility and high-beta ETFs ...

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