27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
Low volatility exchange traded funds are getting plenty of attention (and assets) from investors these, but the ones on the receiving end of the most adulation are, not surprisingly, large-cap funds like the Invesco S&P 500 Low Volatility ETF (NYSE:SPLV).
What Happened
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As is often the case, low volatility or otherwise, mid-cap stocks and ETFs are going overlooked. However, snubbing mid caps is a bad idea for long-term investors and in the current environment, ignoring low volatility mid-cap stocks isn't a good idea, either. Enter the Invesco S&P MidCap Low Volatility ETF (NYSE:XMLV).
XMLV is ideally suited for the highly volatile near-term scene facing riskier assets as well as being a perfect fund for long-term investors looking for mid-cap exposure. Over the past three months, XMLV is higher by 0.20% while the S&P MidCap 400 Index is lower by 3.7%.
Why It's Important
XMLV, which is six and a half years old, follows the S&P MidCap 400 Low Volatility Index, a collection of the 80 stocks from the S&P MidCap 400 with the lowest trailing 12-month volatility, but to be precise, XMLV currently holds 78 stock.
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Usually, the trade-off with low volatility ETFs is not capturing the full impact of bull markets. XMLV has bucked that trend over the past three years. While the Invesco ETF was 300 basis points less volatile than the S&P MidCap 400 over that period, XMLV also outpaced the mid-cap benchmark by more than 1,400 basis points over that stretch.
XMLV offers a familiar sector view relative to its large-cap, low volatility rivals as the real estate, financial services and utilities sectors combine for about 72% of the fund's weight.
What's Next
As for what's next, it's reasonable to expect more inflows to XMLV if the market's recently volatile ways continue. Over the past 30 days, XMLV has added $193.3 million in new assets, second only to SPLV among Invesco ETFs during that span, according to issuer data.
Inflows to XMLV aren't new. Over the past year, the ETF has added $1.57 billion in new assets, again second only to SPLV among Invesco ETFs.
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27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.