Core Viewpoint - A minimum volatility ETF, such as the iShares MSCI USA Minimum Volatility Factor ETF, can enhance risk-adjusted returns while maintaining growth opportunities in a stable economic environment [1][12]. Group 1: Market Conditions - Current market conditions are favorable, with steady economic growth, controlled inflation, and a booming artificial intelligence sector contributing to low volatility [1]. - Investors should be aware that market conditions can change, leading to potential portfolio losses and impulsive decision-making [2]. Group 2: Portfolio Strategy - To withstand market downturns, it is advisable to include defensive equity positions in portfolios, which can help mitigate volatility while preserving growth potential [3]. - The iShares MSCI USA Minimum Volatility Factor ETF tracks U.S. equities with lower volatility characteristics compared to the broader market [4]. Group 3: ETF Characteristics - The Minimum Volatility ETF optimizes a broad universe of large-cap and mid-cap U.S. stocks to achieve the lowest absolute volatility, rather than simply selecting low-volatility stocks [5]. - In contrast to the Invesco S&P 500 Low Volatility ETF, which focuses solely on below-average volatility stocks, the Minimum Volatility ETF can include higher individual volatility stocks if they contribute to overall lower portfolio volatility [7][10]. Group 4: Performance Metrics - The Minimum Volatility ETF has a 10-year portfolio beta of 0.93 and a standard deviation of returns of 12.23%, while the Low Volatility ETF has a beta of 1.0 and a standard deviation of 12.53% [11]. - Over the past decade, the Minimum Volatility ETF has outperformed the Low Volatility ETF by an average of 1.8% per year, demonstrating effective risk management at the portfolio level [12].

Core Viewpoint - The iShares MSCI USA Min Vol Factor ETF (USMV) is a significant player in the Large Cap Blend segment of the US equity market, with over $23.81 billion in assets, making it one of the largest ETFs in this category [1]. Group 1: Fund Overview - USMV is a passively managed ETF launched on October 18, 2011, and is sponsored by Blackrock [1]. - The fund targets large cap companies, typically with market capitalizations above $10 billion, offering stability and reliable cash flows compared to mid and small cap companies [2]. Group 2: Costs and Performance - The ETF has an annual operating expense ratio of 0.15%, positioning it as a cost-effective option in the market [3]. - It has a 12-month trailing dividend yield of 1.57% [3]. - USMV has increased by approximately 6.30% year-to-date and is up about 13.33% over the past year, with a trading range between $84.95 and $94.57 in the last 52 weeks [6]. Group 3: Sector Exposure and Holdings - The ETF has a significant allocation of about 27.30% to the Information Technology sector, followed by Financials and Healthcare [4]. - International Business Machines Co (IBM) constitutes around 1.60% of total assets, with the top 10 holdings making up about 15.26% of total assets under management [5]. Group 4: Risk Profile - USMV aims to match the performance of the MSCI USA Minimum Volatility Index, which includes U.S. equities with lower volatility characteristics [6]. - The ETF has a beta of 0.70 and a standard deviation of 12.27% over the trailing three-year period, indicating a medium risk profile [7]. Group 5: Alternatives - USMV holds a Zacks ETF Rank of 2 (Buy), indicating favorable expected returns and momentum [8]. - Other comparable ETFs include the SPDR S&P 500 ETF (SPY) and the Vanguard S&P 500 ETF (VOO), with assets of $641.52 billion and $688.84 billion respectively, and lower expense ratios of 0.09% for SPY and 0.03% for VOO [9]. Group 6: Market Trends - There is a growing trend among retail and institutional investors towards passively managed ETFs due to their low costs, transparency, flexibility, and tax efficiency, making them suitable for long-term investment strategies [10].