Want To Minimize Your Risk? This ETF Focuses On Low-Volatility Stocks
Date
1/29/2025 12:14:51 AM
(MENAFN- Baystreet)
With the threat of tariffs and Stocks trading at or near their highs, this may not seem like an ideal time to be investing in the stock market if your focus is on Canada stocks. But one way for investors to reduce their overall risk in the long term is to target stocks which aren't volatile and which can provide you with good stability.
One exchange-traded fund (ETF) which looks to provide you with that kind of stability is the iShares MSCI Min Vol Canada index (TSX:XMV). This ETF has 70 holdings and focuses on low-volatility equities and has an expense ratio of 0.34%. It can make for a good investment to hold if you're worried about a market decline.
The portfolio averages a price-to-earnings multiple of just 19, which is attractive as many top-performing stocks trade at much higher valuations. Big names such as Enbridge (TSX:ENB)(NYSE:ENB), Royal Bank of Canada (TSX:RY)(NYSE:RY), and Thomson Reuters (TSX:TRI)(NYSE:TRI) are the fund's top three holdings. However, those three stocks combined account for just 9% of the portfolio's overall weight. The fund isn't heavily dependent on any one stock, which is another reason why this can make for a good, diverse investment to put in your portfolio.
This ETF also pays an attractive dividend which yields around 2.4%, giving investors plenty of reason to just hang on to it.
If you're not sure where to invest in right now, this is a fund you may want to consider both for the dividend it pays and the stability it can provide your portfolio with. The ETF's value has risen by 14% over the past 12 months.
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