As September proves to be a volatile month for the stock market, investors are facing more challenges when it comes to trading Big Tech stocks. However, there is one low-volatility ETF that is still making significant gains. Alliance Bernstein has introduced the AB US Low Volatility Equity ETF, which holds top positions in tech giants such as Microsoft, Apple, and Alphabet.
According to Noel Archard, the global head of ETFs and investor solutions at Alliance Bernstein, technology plays a crucial role in our daily lives, but there are other industries that offer promising investment opportunities. Investing in low-volatility ETFs provides a sense of stability and security during times of market uncertainty. While the AB US Low Volatility ETF focuses on tech stocks, it also includes exposure to consumer staples and financial companies, acting as “bumpers” to minimize risk.
In comparison to Invesco’s Low Volatility ETF, which holds more traditional stable stocks such as Berkshire-Hathaway, Coca-Cola, and Visa, the AB US Low Volatility ETF offers a different approach by incorporating a mix of tech and non-tech companies. This diverse portfolio enables investors to benefit from the growth potential of the tech sector while maintaining a level of safety through exposure to less volatile industries.
Archard emphasizes the importance of diversification in managing risk within a portfolio. By investing in a low-volatility ETF that includes a variety of sectors and industries, investors can reduce their exposure to market fluctuations and protect their capital. The inclusion of companies like Procter & Gamble and Fiserv in the AB US Low Volatility ETF further reinforces the strategy of blending tech and non-tech stocks for optimal risk management.
As the AB US Low Volatility ETF continues to outperform the market with a 16% increase year-to-date, investors are recognizing the benefits of incorporating low-volatility ETFs into their investment strategies. By diversifying across sectors and industries, investors can achieve a balance between growth potential and risk mitigation. In a volatile market environment like September, low-volatility ETFs offer a stable and secure option for investors looking to navigate uncertain times while maximizing returns.