VictoryShares US 500 Volatility Wtd ETF (CFA)
CFA Price and Sentiment
CFA Latest news
With a lower unemployment rate and positive job gains reported, the economic outlook for the rest of the year is looking extremely strong, reports Reuters. While earnings season saw some initial concerns of how much growth the large- and mega-caps could continue to produce, as most outperformed yet again, a growing has helped assuage concerns.
Earnings season has kicked off with extremely strong growth and the expectations of positive numbers from most companies, reports CNBC. Earnings are showing their strongest rate of growth since 2009 and the post-Great Recession recovery.
Some broad market benchmarks may not be as diverse as investors are led to believe. Take the case of the S&P 500 where six stocks – Apple (NASDAQ: AAPL), Microsoft (NASDAQ: MSFT), Amazon (NASDAQ: AMZN), Facebook (NASDAQ: FB) and two share classes of Alphabet (NASDAQ: GOOG) combine for over 21% of the index's weight.
This exactly the type of environment in which investors may be inclined to embrace the low volatility factor. However, traditional strategies adhering to that factor are leaving some investors disappointed this year.
Markets appear sanguine for the time being, but as the March swoon reminds investors, volatility can spike at a moment’s notice. That turbulence is one reason why the low volatility factor remains popular, but investors may want to consider different approaches to the factor, including the VictoryShares US 500 Volatility Wtd ETF (CFA).
Investors who are concerned about concentration risks associated with the traditional market capitalization-weighted indexing approach may consider alternative index strategies, such as volatility-weighted smart beta exchange traded funds that help limit potential drawdowns.