Market Gyrations Indicate This ETF Still Merits AttentionETF Trends is now VettaFi. Read More --Advisors and long-term investors know it's best to not get caught in stocks' behavior over a day or even a week. Still, it's fair to say equities were all over the place last week, likely whipsawing some jittery market participants.However, low volatility investing can keep even the most pensive investors in the game. Many ETFs answer that call, including the [Invesco QQQ Low Volatility ETF (QQLV)].One of the new ...

Core Viewpoint - Low-volatility stocks and related ETFs, particularly the Invesco QQQ Low Volatility ETF (QQLV), are gaining attention as a viable investment option amid recent economic data suggesting a need for protective strategies in portfolios [2][6]. Group 1: Investment Strategy - QQLV tracks the Nasdaq Low Volatility Index, which is based on the premise that stocks with smaller drawdowns can yield better long-term returns [2][5]. - Investors are encouraged to consider low-volatility ETFs like QQLV for portfolio protection, especially in uncertain market conditions [3][4]. - The current allocation of QQLV, with 28.44% in consumer staples, presents a compelling value case despite the sector's struggles this year [6][7]. Group 2: Market Dynamics - Research indicates that low-volatility stocks have historically provided higher returns compared to high-volatility stocks, challenging traditional finance theories [5]. - QQLV's diversified exposure, including a combined 17% weight in consumer cyclical, healthcare, and materials stocks, enhances its attractiveness as a near-term investment [7]. - The sensitivity of low-volatility stocks to interest rates suggests that declining rates could further benefit QQLV, as these stocks behave similarly to long-duration bonds [8].

Core Viewpoint - The Invesco QQQ Low Volatility ETF (QQLV) serves as a hedge in investment portfolios, particularly during uncertain market conditions, and has shown positive performance despite recent market challenges [1][3]. Group 1: ETF Overview - QQLV, set to celebrate its first anniversary in December, tracks the Nasdaq Low Volatility Index, which is a low volatility representation of the Nasdaq-100 Index (NDX) [2]. - The ETF is designed to select components based on trailing 12-month volatility traits, which may result in less glamour compared to traditional NDX-tracking ETFs [2][3]. Group 2: Performance and Market Context - Over the past month, QQLV has increased by 1.61%, indicating its ability to perform well even in tricky market conditions [3]. - Low volatility ETFs like QQLV are positioned to reduce volatility and enhance stability, making them attractive during periods of market uncertainty [4][7]. Group 3: Investment Strategy - The low-volatility investment strategy aims to provide returns similar to the broader market over time while minimizing volatility, making it suitable for conservative investors [5][8]. - Low-volatility stocks tend to perform better during market declines, experiencing smaller drawdowns and compounding positive excess returns [6][7].

Economic Overview - The U.S. economy added only 73,000 jobs in July, significantly below the expected 104,000, with downward revisions in May and June erasing a total of 258,000 jobs, marking the largest two-month revision since May 2020 [1] - The unemployment rate increased to 4.2%, aligning with forecasts but remaining near historic lows [1][2] Market Reactions - Wall Street analysts are reassessing their economic forecasts due to the disappointing July jobs report, indicating a potential loss of strength in the labor market [2] - Following the weak labor market data, market expectations for a Federal Reserve interest rate cut in September surged to 80%, up from 38% the previous day [3] Federal Reserve Insights - Leslie Falcone from UBS Global Wealth Management anticipates the Fed will begin cutting rates in September, with a total of about 100 basis points in consecutive cuts [4] - Fed officials had previously expressed concerns about labor market softness, which now appear to be validated [5] Trade Tensions - Recent escalations in trade tensions, including a surprise 39% tariff on Switzerland by President Trump, have added to investor uncertainty, catching markets off guard [6] Investment Strategies - In light of economic uncertainty, investors are advised to consider defensive exchange-traded funds (ETFs) that may provide stability [7] - Specific ETFs mentioned include: - Invesco QQQ Low Volatility ETF (QQLV), which tracks low volatility stocks within the Nasdaq-100 Index and charges 25 basis points in fees [8] - Cullen Enhanced Equity Income ETF (DIVP), focusing on large-cap, dividend-paying companies with a yield of 7.31% and charging 55 basis points in fees [9] - S&P 500 Dividend Aristocrats ETF (NOBL), targeting companies with a history of increasing dividends for at least 25 years, charging 35 basis points in fees [10] - First Trust Utilities AlphaDEX Fund (FXU), designed to identify stocks from the Russell 1000 Index that may generate positive alpha, charging 63 basis points in fees [11][12] - US Aerospace & Defense iShares ETF (ITA), measuring the performance of the aerospace and defense sector, charging 40 basis points in fees [13]