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ETF Specialist

A Framework for Evaluating Low-Volatility Funds

There are five important investment process questions to ask before buying a low-volatility fund.

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A version of this article was published in the May 2018 issue of Morningstar ETFInvestor. Download a complimentary copy of Morningstar ETFInvestor by visiting the website.

Well-constructed low-volatility stock funds should offer better downside protection, a smoother ride, and better risk-adjusted performance than the market over the long term. But not all low-volatility funds are created equal. Differences in how they are constructed can affect performance and their odds of success. It's important to have a strong framework to evaluate how these funds are built.

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Alex Bryan has a position in the following securities mentioned above: USMV. Find out about Morningstar’s editorial policies.