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Built for Low Volatility, U.S. Stock ETF Swings More Than Market

Investors in exchange-traded funds that are designed to limit the effect of U.S. stock swings may find that they magnify the moves instead.

The attached chart illustrates this by comparing the PowerShares Standard & Poor’s 500 Low Volatility ETF with the iShares S&P 500 ETF, based on 30-day volatility readings. The PowerShares fund tracks an index of 100 stocks in the S&P 500 that fluctuated the least in the last 12 months.