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Low Volatility ETF Underperformed Index Fund During 2020 Market Crash

1 report, 1 independent Updated Sun 00:00
AI-generated briefing. Brind wrote this from the reports listed below. It can be wrong. Each section says how much you can rely on it, and the sources are linked so you can check.

What happened

Some supportReported by 1 outlet

The Invesco S&P 500 Low Volatility ETF (SPLV) lost approximately 36% during the 2020 market crash, which was worse than the 34% loss experienced by the Vanguard S&P 500 ETF (VOO). The fund is dominated by utilities, REITs, and insurers, with WEC Energy Group and Duke Energy each representing nearly 1% of the fund's holdings.

From aol.com

Why it matters

Some supportBrind's analysis of the reports

The comparison highlights that the low-volatility fund cost a hypothetical $300,000 holder an extra $5,430 during the 2020 period compared to the index fund. This demonstrates that sector concentration within low-volatility funds can lead to greater losses during specific market shocks.

From aol.com

Who's involved

  • WEC Energy GroupA utility company holding in the Invesco S&P 500 Low Volatility ETF
  • Duke EnergyAn electric power and natural gas holding company holding in the Invesco S&P 500 Low Volatility ETF

Who could feel it

Possible knock-on effects

These are possibilities Brind reasoned out, not predictions, and not advice. Most are not stated in any report.

  • WEC Energy GroupSpeculative

    The utility sector could see its investment returns affected by the concentration risk within low-volatility funds.

  • Duke EnergySpeculative

    The utility sector could see its investment returns affected by the concentration risk within low-volatility funds.

Possible ripples

Who this could reach next, traced step by step from the reporting. Possibilities worth considering, not forecasts.

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The entities involved

Coverage

Newest first; wire copies grouped