When less risk equals more return
- May 15th, 2012
It’s always gratifying when a topic you have been writing about starts getting wider coverage. I have been writing about the ‘low volatility anomaly‘ for awhile now and devote a section in Abnormal Returns: Winning Strategies from the Frontlines of the Investment Blogosphere book to the topic. Below is a video of Christine Benz and Shannon Zimmerman at Morningstar talking about some research results showing mutual funds with lower risk outperforming higher risk funds.
More importantly they note the fact that investors who invest in low volatility funds have a tendency to perform better because they are less likely to get shook out of their positions at the worst possible time. One quibble is whether it is worth the time and effort for investors to look at actively managed low volatility mutual funds when there are passive alternatives. That issue aside, he video is a nice primer on low volatility investing and is worth a quick watch.
Abnormal Returns is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com. If you click on my Amazon.com links and buy anything, even something other than the product advertised, I earn a small commission, yet you don't pay any extra. Thank you for your support.
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.
Abnormal Returns has over its seven-year life become a fixture in the financial blogosphere. Over thousands of posts we have striven to bring the best of the financial blogosphere to readers. In that time the idea of a “forecast-free investment blog” remains as useful as it did six years ago. More »
- Thursday links: understanding Wall Street
- 6 Essential Principles from Pragmatic Capitalism by Cullen Roche
- Wednesday links: the multiplier effect
- Tuesday links: knowledge alone
- To bond ETF or not: an excerpt from Rational Expectations by William Bernstein
- Monday links: excessive valuations
- Sunday links: paralyzed with fear
- Top clicks this week on Abnormal Returns
- Saturday links: ripe for disruption
- Friday links: investor class attentions