Tom Lydon, editor and proprietor of ETFTrends.com and the president of Global Trends Investments, attributed this kind of portfolio makeup to how growth- and momentum-focused the"When you look at low-volatility ETFs, there's more consumer staples," he said, also on Monday's "ETF Edge." "No matter what the market's doing, people are still going to buy McDonald's. They're still going to buy Pepsi. They're still going to take their trash out.
So, while Lydon understood why investors might be choosing flight over fight in this pullback, he didn't want them to lose sight of the areas that could bring them bigger gains — or at least a solid hedge. "Right now, there are a lot of fully invested investors out there that are feeling a little bit nervous. If you feel it's late cycle in the market, you want to take a little bit off the table, that's fine. On the other hand, if you want to downshift a bit, there's some low-volatility ETFs out there," Lydon said.
"Individual investors are under-allocated overseas in developed markets and emerging markets," he continued. "Look to see if you've missed this emerging market move to play it in a low-volatility way. And there's some great low-volatility emerging market ETFs." All three of iShares' low-volatility ETFs declined by more than 1% in Monday's trading session, with the emerging markets fund being the standout underperformer, down nearly 3%. The Cboe Volatility Index, commonly known as the VIX or the market's
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