Low-Volatility Funds Got Volatile as U.S. Stock Market Sold Off
- High-dividend stocks bear brunt of worst selloff since Brexit
- Concerns about valuation in low-vol space surface again
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Friday’s U.S. stock rout, the worst since Britain voted to leave the European Union, spared few investors, particularly not owners of exchange-traded funds designed to minimize turbulence.
Low-beta ETFs plunged even more than the broader market, extending a move that began two days earlier. The PowerShares S&P 500 Low Volatility portfolio slid almost 3 percent on Friday and the iShares Edge MSCI Min Vol USA ETF fell 2.7 percent, the worst daily losses in more than a year. Meanwhile, the S&P 500 dropped 2.5 percent.