King of Low Vol ETFs Tops $5B in AUM
In further proof that investors' love affair with low volatility ETFs is ongoing, the PowerShares S&P 500 Low Volatility Portfolio (NYSE: SPLV) crossed the lofty $5 billion in assets under management level last Friday.
To be precise, the PowerShares S&P 500 Low Volatility Portfolio, the undisputed king of low volatility ETFs, at least in terms of size, had $5.387 billion in AUM at the start of trading Tuesday, according to PowerShares data.
Topping $5 billion in AUM is impressive for any ETF, but SPLV's ascent to that level is among the most stellar when considering the fund is not yet two years old. SPLV turns two on May 5.
SPLV's story is one of perfect timing, something many new ETFs lack upon inception. On its own, 2011 was not a great year for stocks, but SPLV provided investors with a new safe-haven from global shocks such as the eurozone debt crisis and slowing emerging markets growth.
Overall, the past three years have been kind to stocks, but skittish investors have embraced value over growth, meaning it has been supposedly boring sectors that have lead the market higher.
Consumer staples, health care and utilities have been star performers at the sector level and that is good news for an ETF that allocates a combined 64 percent of its weight to those groups, which SPLV does.
Further underscoring the notion that SPLV is ideally suited to the current environment are these numbers: The ETF has attracted nearly $3.2 billion of its current AUM tally in the past year and $1.7 billion just this year. Said differently, nearly a third of SPLV's assets have come into the ETF in just the first four months of 2013, according to PowerShares data.
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