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DIV: A Low Volatility Dividend ETF For A Wild Market

Published Wed, 30 Jan 2019 13:39:51 -0500 on Seeking Alpha

The global economic environment has become more uncertain and we might witness higher levels of volatility in the stock markets in 2019 as compared to the previous year. In this backdrop, I believe investors should adopt a defensive approach by increasing their exposure to low-volatility stocks. The Global X Super Dividend U.S. ETF (DIV), which includes 50 low-volatility stocks, is a great ETF for the current economic backdrop.

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The S&P 500 has generated phenomenal returns after rising from the depths of the global financial crisis almost ten years ago. In this period, the index has surged from an intraday low of 666.79 in early March 2009 to 2,665 currently, depicting a gain of almost 300%. But it seems unlikely that investors will continue to see strong gains, particularly in 2019 when we might witness higher levels of volatility in the stock markets. We’ve already seen some warning signs. The S&P 500 has tumbled by almost 9% since early October while the CBOE Volatility Index, which is the most recognized measure of the volatility of the US stock market, climbed by 40% to almost 18 at the time of this writing.
There are a number of factors that have fueled the volatility. These include the Federal Reserve’s monetary policy tightening measures, the interest rate hikes, growing concerns over the economy which could overheat, the escalating trade war between the US and China, the government shutdown and chances of... Read more