USMV: The Right Time But Be Careful With Tech Exposure

seekingalpha04-29

iShares MSCI USA Min Vol Factor ETF is a low-volatility ETF designed to provide investors with less risk exposure in U.S. equities.The fund's top holdings include Broadcom, Merck & Co., Waste ...

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href=https://seekingalpha.com/article/4687144-usmv-the-right-time-but-be-careful-with-tech-exposure><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>iShares MSCI USA Min Vol Factor ETF is a low-volatility ETF designed to provide investors with less risk exposure in U.S. equities.The fund's top holdings include Broadcom, Merck & Co., Waste ...</p>\n\n<a href=\"https://seekingalpha.com/article/4687144-usmv-the-right-time-but-be-careful-with-tech-exposure\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"SG9999013999.USD","symbol_name":"UOB UNITED GLOBAL HEALTHCARE FUND (USDHDG) 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low-volatility ETF designed to provide investors with less risk exposure in U.S. equities.The fund's top holdings include Broadcom, Merck & Co., Waste Management, IBM, and Waste Connections.USMV offers diversification across various sectors, with the Information Technology sector holding the largest weightage at 24.59%.   TERADAT SANTIVIVUT I always make it a point that you can be bearish and long, and that playing defense is more about lowering your volatility exposure instead of making an outright directional bet on stocks. That's why I'm a fan of the iShares MSCI USA Min Vol Factor ETF (BATS:USMV). USMV is an exchange-traded fund designed to track the investment results of an index composed of U.S. equities that, on aggregate, exhibit lower volatility characteristics compared to the broader U.S. equity market. By focusing on lower-volatility equities, USMV aims to provide investors with the potential for less risk. The fund was launched on October 18, 2011, and has nearly $24 billion in assets under management. The Fund's Top Holdings A closer look at USMV's portfolio reveals a diverse range of holdings. Top positions include  Broadcom (AVGO) - as one of the largest semiconductor companies globally, Broadcom Inc. is a significant holding in USMV's portfolio. The company specializes in infrastructure software solutions and semiconductor devices and commands a substantial 2.09% of USMV’s total assets.  Merck & Co., Inc. (MRK) - a renowned name in the global pharmaceutical industry, Merck & Co Inc., holds the second spot in USMV's portfolio. With a weightage of 1.72%, Merck's robust product portfolio and steady revenue stream contribute to USMV's overall performance. Waste Management Inc. (WM) - a leading provider of comprehensive waste management environmental services in North America, also features prominently in USMV's portfolio. Its 1.71% weightage underscores its consistent performance and stable business model. International Business Machines Corp. (IBM) - a multinational technology company that provides hardware, software, cloud-based services, and cognitive computing. Its significant role in the technology sector and its 1.66% weightage in USMV's portfolio underline its relevance. Waste Connections Inc. (WCN) - a prominent waste service company in North America, rounds up the top five holdings in USMV's portfolio. With a weightage of 1.65%, the company's steady cash flows and robust business model contribute positively to the fund.  I like the mix here and weightings of positions overall here. Sector Composition and Weightings USMV's portfolio is not confined to a single sector. Instead, it spans across various sectors, providing a diversified investment approach. The Information Technology sector holds the largest weightage at 24.59%, followed by Health Care at 16.30%. The Financials sector accounts for 15.74%, while Consumer Staples and Industrials make up 11.31% and 8.98%, respectively. Utilities, Consumer Discretionary, Communication, Materials, and Energy sectors make up the rest of the fund's portfolio. ishares.com Peer Comparison The Invesco S&P 500 Low Volatility ETF (SPLV) is a good fund to compare USMV to. When we look at the price ratio comparison, USMV did quite well and now seems to be turning lower. The key reason for the differential? USMV has 24.59% in Technology, while SPLV has just 7.49%. Amazing how one sector can skew the results so dramatically, no? This I would consider a negative to USMV, as clearly, despite the low volatility tilt, it will still be beholden to Technology out or underperformance overall. stockcharts.com Pros and Cons of the iShares MSCI USA Min Vol Factor ETF Investing in USMV comes with its set of advantages and disadvantages. Pros:   Lower Volatility: As the fund's name suggests, USMV focuses on stocks with lower volatility, potentially reducing the risk for investors.  Diversification: USMV offers exposure to various sectors, enhancing portfolio diversification.  Lower Expense Ratio: With an expense ratio of 0.15%, the fund is a cost-effective investment option.  Cons:   Limited Upside Potential: While lower volatility stocks can help mitigate risk, they may also limit the fund's growth potential during market upswings.  Market Risk: Like all equity investments, USMV is subject to market risk. The fund's value can fluctuate based on market conditions.  Conclusion  Investing in the iShares MSCI USA Min Vol Factor ETF can be an attractive option for those seeking exposure to U.S. equities with potentially less risk. Its focus on lower volatility stocks and diversified portfolio can provide a degree of stability. I like the fund overall and actually think the timing is right to lower overall volatility in what I expect is likely a volatile few months. The only thing that makes me hesitate is the Technology exposure here. Good fund, just be mindful of your sector risks.","kind":null,"is_publish_news":null,"is_publish_highlight":null,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.22.4","shortVersion":"4.22.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2431707443"}