September lives up to its reputation as a volatile month, and this presents more challenges for the Big Tech trade. But one low-volatility ETF is still betting big.
Alliance Bernstein is behind the AB US Low Volatility Equity ETF. According to FactSet, the top three holdings include mega-cap gainers Microsoft, Apple And Alphabet.
“Technology touches everything we do in most facets of our lives, but there are other industries that play a role as well,” Noel Archard, the firm’s global head of ETFs and investor solutions, told CNBC’s “ETF Edge” this week . “So we continue to see a lot of interest in broader investments.”
For comparison, FactSet lists the top holdings for Invesco’s Low Volatility ETF as stocks that are traditionally more stable: Berkshire Hathaway, Coca-cola And Visa.
Archard notes that there is still a place for historically less volatile stocks such as consumer goods And financial affairs. He sees them as ‘bumpers’ that can help limit the risks.
For example, FactSet shows that Alliance Bernstein’s low-volatility ETF also includes exposure to, among others Procter & Gamble And Fiserv.
“You forget about volatility until it’s there, and then suddenly it becomes very central,” Archard says.
The AB US Low Volatility ETF is up 16% so far this year as of Wednesday’s close.
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