Defying the Risk and Return Tradeoff | An In Depth Look at Low Volatility Investing
Two Quants and a Financial PlannerApril 08, 202400:57:06

Defying the Risk and Return Tradeoff | An In Depth Look at Low Volatility Investing

In investing, there is supposed to be a clear tradeoff between return and risk. Strategies that reduce risk are also supposed to come with a corresponding reduction in return But one factor defies that tradeoff. In this episode, we look at the low volatility factor. We discuss how it is measured, why it works and how it can be used in portfolios. We also examine some popular low volatility ETFs and look at the key criteria investors should look at when evaluating them.

02:31 - Defining low volatility
06:41 - Defying the risk and return tradeoff
09:05 - Measuring low volatility against the criteria of a good investing factor
11:11 - The risk and return data of low volatility
18:22 - Why does low volatility work?
22:44 - Breaking down the academic research on low volatility
29:58 - Using low volatility with other factors
36:03 - Evaluating some low volatility ETFS - USMV, SPLV
45;47 - Using low volatility in a multi-asset portfolio
49:33 - Low volatility and financial planning

#lowvolatilityinvesting

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