Consider low volatility stocks for a risk-aware approach to growth potential
Look to asset allocation solutions to help diversify your portfolio
Both the equity and fixed income markets can be incredibly volatile. Investors may at times wonder whether they should be invested at all. But staying invested, even through short-term market disruption, can be a key factor in building long-term wealth. These ideas can help investors tailor their portfolios for volatile markets.
In an ideal world, fundamentals alone would drive the markets. But that’s not the world we’re living in – or investing in. Today, a tweet in the morning can drive a sell-off in the afternoon, only to be reversed by the next day’s headlines. But jumping in and out of the markets to avoid volatility can be even more damaging to a portfolio than simply riding it out.
Equities: Consider low volatility stocks for a risk-aware approach to growth potential
“More risk equals more returns” is a common misconception among investors. Yet the returns of low-volatility equities have historically provided a layer of protection in declining markets by capturing a smaller portion of downside movement, relative to the broader equity markets.
For investors concerned about volatility, but who are also seeking to maintain equity market exposure, low-volatility strategies may help to reduce downside risk.
Bottom line: Low volatility stock portfolios are designed to help investors benefit from the market’s upside while managing the impact of its downside.
Asset allocation: Look to asset allocation solution to help diversify
Effective diversification has the potential to provide stable portfolio outcomes in the face of increasing market volatility. Invesco Portfolios are constructed using strategic long-term asset allocation, seeking diversification and higher risk-adjusted returns for each level of risk exposure. The portfolios invest in a mix of both actively managed mutual funds and passive, factor-based exchange-traded funds (ETFs) across varying asset classes.
Bottom line: Invesco Portfolios are convenient, low-cost, multi-asset solutions, spanning five investor risk profiles – conservative, moderate, balanced, growth and high growth.
Invesco manages a full suite of investment solutions for investors. Consult an advisor to help you build a portfolio that is suitable to your personal goals.
For those worried about today’s uncertain markets, we would highlight these options to help manage volatility in an investor’s portfolio:
ULV.F
Invesco S&P 500® Low Volatility Index ETF- CAD Hedged
This ETF primarily invests in equity securities of U.S. companies, captures much of the upside during rising markets, while limiting downside exposure when markets decline.
PORTFOLIO
Invesco Portfolios
Invesco Portfolios provide access to a cost-effective blend of actively managed and passive strategies. Actively managed strategies seek to outperform index returns, while passive strategies help keep costs low.
PORTFOLIO
Invesco ETF Portfolios
Strictly using exchange -traded funds (ETFs), Invesco ETF Portfolios provide low-cost access to markets around the world through a blend of passive index-based strategies.
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DISCLAIMER
Past performance is not a guarantee or reliable indicator of future results.
S&P®, S&P 500®, and S&P 500 Low Volatility Index® are registered trademarks of Standard & Poor’s Financial Services LLC and have been licensed for use by S&P Dow Jones Indices LLC and sublicensed for certain purposes by Invesco Canada Ltd.
There are risks involved with investing in ETFs. Please read the prospectus for a complete description of risks relevant to the ETF. Ordinary brokerage commissions apply to purchases and sales of ETF units.
Commissions, management fees and expenses may all be associated with investments in mutual funds and exchange-traded funds (ETFs). Trailing commissions may be associated with investments in mutual funds. For mutual funds the indicated rates of return are the historical annual compounded total returns, including changes in share/unit value and reinvestment of all distributions, and do not take into account sales, redemption, distribution or optional charges, or income taxes payable by any investor, which would have reduced returns. For ETFs unless otherwise indicated, rates of return for periods greater than one year are historical annual compound total returns including changes in unit value and reinvestment of all distributions, and do not take into account any brokerage commissions or income taxes payable by any unitholder that would have reduced returns. Mutual funds and ETFs are not guaranteed, their values change frequently and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus before investing. Copies are available from Invesco Canada Ltd. at www.invesco.ca
The views expressed above are based on current market conditions and are subject to change without notice; they are not intended to convey specific investment advice. Forward-looking statements are not guarantees of future results. They involve risks, uncertainties and assumptions, there can no assurance that actual results will not differ materially from expectations.