Low Volatility ETF (USMV) Hits New 52-Week High

For investors seeking momentum, iShares Edge MSCI Min Vol USA ETF USMV is probably on the radar now. The fund just hit a 52-week high and is up 18% from its 52-week low price of $49.50 per share.

But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:

USMV in Focus

This ETF provides exposure to U.S. stocks with potentially lower risk. It has a well-diversified portfolio with key holdings in information technology, healthcare, financials and consumer staples. The fund charges 15 basis points in annual fees (read: all the Large Cap Blend ETFs here).

Why the Move?

The low volatility corner of the broader market has been an area to watch lately given the bouts of volatility and uncertainty. This is especially true as global growth concerns have aggravated following a series of weak economic data. Additionally, the Brexit issue and still lingering uncertainty surrounding the U.S.-China trade deal weighed on the market. Notably, low volatility products have the potential to outpace the broader market in bearish conditions or in an uncertain environment, providing significant protection to the portfolio. These funds include more stable stocks that have experienced the least price movement in their portfolio. Further, these are allocated primarily to defensive sectors that usually have a higher distribution yield than the broader markets.

More Gains Ahead?

Currently, USMV has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook. Therefore, it is hard to get a handle on its future returns one way or the other. However, many of the segments that make up this ETF have a strong Zacks Industry Rank. So, there is definitely some promise for those who want to ride this surging ETF a little further.

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iShares Edge MSCI Min Vol USA ETF (USMV): ETF Research Reports

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Zacks Investment Research