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Best Low Volatility ETF UK – Compare Top ETFs 2021

Investing in Low Volatility ETFs (Exchange Traded Funds) is one of the best ways to ensure healthy return while riding out the ups and downs of the stock market. This is more important than ever in the modern COVID era.

There are, however, a number of factors, including minimum investment, its performance in recent months and any fees, which may come into your consideration. This guide will provide a look into the best investments for a Low Volatility ETF Portfolio.

Key Takeaways on Low Volatility ETF

  • Low volatility ETFs are popular among investors as a way of adding stability to a portfolio.
  • Some of the best low volatility ETFs to buy include the Powershares S&P 500 Low Volatility ETF (SPLV), the Invesco High Dividend Low Volatility ETF (SHPD), and the FlexShares Developed Markets Low Volatility Climate ESG UCITS ETF (QVFD).
  • Many providers off low volatility ETFs targeting different sectors, such as clean energy, emerging markets, S&P 500 and more.
  • You can invest in the best low volatility ETFs with 0% commission on our recommended broker, eToro.

Best Low Volatility ETF UK 2021 List

  • Powershares S&P 500 Low Volatility ETF (SPLV)
  • Invesco High Dividend Low Volatility ETF (SHPD)
  • FlexShares Developed Markets Low Volatility Climate ESG UCITS ETF (QVFD)
  • Invesco S&P MidCap Low Volatility ETF (XMLV)
  • iShares MSCI Emerging Markets Min Vol Factor ETF (EEMV)
  • iShares MSCI USA Min Vol Factor ETF (USMV)
  • iShares Edge MSCI EAFE Minimum Volatility ETF (EFAV)
  • BMO Low Volatility Canadian Equity ETF (ZLB)
  • Legg Mason Low Volatility High Dividend ETF (LVHD)
  • Invesco FTSE Emerging Markets High Dividend Low Volatility UCITS ETF USD (EMHD)

You can invest in these top low volatility ETFs with 0% commission on eToro, our recommended ETF broker.

Best Low Volatility ETFs UK Reviewed

1. Powershares S&P 500 Low Volatility ETF (SPLV)

Containing some of the US’s largest companies, from Apple to ExxonMobil to IBM, this fund aims to focus on so-called “Blue Chip” stocks that are likely to offer significant returns, no matter the state of the market. While having dipped slightly in 2020, which was to be expected as a global pandemic hit, the ETF has gradually grown over the last year.

This ETF will give you exposure to some of the largest companies, while staying reasonably stable when the individual stocks may take a dip on negative profits or other news. Making a 1-year return of 20.73%, putting this ETF in your portfolio could see your money grow significantly in a relatively short time period.

With only a 0.25% expense ratio, this low volatility ETF is reasonably affordable to hold, priced currently at $63.60, if you have a chunk of money to put into the market, this is a great choice. Additionally, the stock pays a regular dividend, allowing you to grow your holding in the stock or reinvest your proceeds elsewhere. A bonus for a great ETF!

68% of retail investor accounts lose money when trading CFDs with this provider.

2. Invesco High Dividend Low Volatility ETF (SPHD)

A stock that I hold in my own portfolio, SPHD offers great opportunities for dividend investors, while staying pretty consistent in its value, otherwise, growing over time. In addition to being a low volatility ETF, SPHD is a monthly dividend payer, growing your portfolio with reinvestment, as well as appreciation in value over time. A good example of why time in the market is better than timing the market, you stand to benefit from the stable growth of the stock and the small distributions it gives you on a monthly basis.

In addition to the above advantages, it is also a well-diversified fund, having fingers in many pies. With an 18.93% return in the last year, it has a low expense ratio of 0.3%, only slightly more expensive than SPLV but worth it for the ROI (return on investment) over time. A popular pick for dividend investors looking for low volatility, this is a must for your portfolio. A great choice for a low volatility dividend ETF.

68% of retail investor accounts lose money when trading CFDs with this provider.

3. FlexShares Developed Markets Low Volatility Climate ESG UCITS ETF (QVFD)

A great investment for those who want to keep ESG (Environmental, Social and Governance) factors in mind when building their portfolio, this clean energy ETF contains companies that are working towards making themselves more friendly to prevent climate change. Containing stocks such as Alphabet (Google’s parent company), Adobe, Microsoft and Johnson & Johnson, the fund has some big names in there. Whether these are truly companies who have either green initiatives or have divested from fossil fuels would require further research, however, for someone looking to divest their portfolio, this may be a good option.

Currently priced at a very reasonable €24.91, it is reasonable, even if you don’t have a load of money to put in. Additionally, the expense ratio for the ETF, much like the others, sits at 0.29%, a small percentage to pay for the returns that would come over time. The chart below shows how the ETF has performed over the last year.

68% of retail investor accounts lose money when trading CFDs with this provider.

4. Invesco S&P MidCap Low Volatility ETF (XMLV)

Tracking the 500 largest companies listed on the stock exchange in the United States, this low volatility S&P 500 ETF has performed well over the last year, without any major dips (see chart below). While tracking many different bigger companies that, in themselves, may have volatile stock prices, spread across five-hundred different stocks, this provides stable growth and low volatility.

Managed by Invesco, a well-known provider of ETFs, the fund doesn’t provide a dividend, however, would allow for steady growth in a portfolio. Stick it out and you will see a return on investment. With a slightly lower expense ratio than the previous one, sitting at 0.25%, the fees for the ETF are relatively cheap. However, while still affordable, the price of the stock is currently at $55.14, a significant rise since this time last year. This is definitely a good choice if you intend to hold for the long-term, offering stability and fairly rapid growth in one.

68% of retail investor accounts lose money when trading CFDs with this provider.

5. iShares MSCI Emerging Markets Min Vol Factor ETF (EEMV)

While it can be interesting to invest in Emerging Markets, the issues that many investors face is the volatility caused by the very fact that the businesses in these ETFs are emerging and uncertain. They are not your typical Blue Chip stock, of which you can be fairly certain that it will perform well.

However, by contrast, this low volatility ETF contains many of the stocks which may be considered to be in Emerging Markets without the uncertainty of individual stocks. This also means that an investor can diversify their portfolio at reasonably minimal risk. Particularly focused on the Asia Pacific Markets, this ETF is currently priced at $62.97. Again, a reasonable price for an entry-level investor to get into the market. With an expense ratio of 0.25%, the fund measures up against other funds like it with very little cost to the investor.

With many ETFs focusing on the US and UK markets, gaining exposure to other markets can be difficult. This is a great way to do that. See below for a chart showing the ETFs performance over the last twelve months.

68% of retail investor accounts lose money when trading CFDs with this provider.

6. iShares MSCI USA Min Vol Factor ETF (USMV)

This ETF offers further exposure to, specifically, the markets in the United States. With many well-known companies, such as Accenture, PepsiCo and Merck & Co included in the mix of stocks in the fund, you can be sure of reasonably good performance from this fund. A return in the last year of 27.26% makes it an amazing pick for your portfolio, providing assured growth over the long and short-term.

Currently priced at $77.56 a share, it may be one of the more pricey ETFs for entry-level investors, however, not out of reach. This is also a great pick for the portfolio of seasoned investors too. With an expense ratio of just 0.15%, it is one of the cheapest ETFs in terms of fees on this list. If your focus is on the US markets currently, this is the fund you want and if you are looking for diversification into US markets, this could work too. Below is a chart of the price over the last year.

68% of retail investor accounts lose money when trading CFDs with this provider.

7. iShares Edge MSCI EAFE Minimum Volatility ETF (EFAV)

Much like the other Low Volatility ETFs that we have covered, the aim is to ride out the storm of stock market fluctuations. This one, by iShares, a well-known provider of ETFs, is currently priced at $77.04, making it one of the more pricey ETFs on this list. However, it is still within an affordable range for beginner investors and seasoned investors alike.

An expense ratio of 0.32% makes this iShares ETF very attractive for those looking for investments with low fees and decent return. With an annualised return of 12.52%, it is one of the lower returns, however, over time, this will build. With holdings including Nestle, Unilever and National Grid, the fund contains some solid stocks and is definitely well-diversified.

An inexpensive fund with decent returns from a trusted ETF provider, you can rely on an asset such as this to give you a great return over time. See below for a chart of the funds performance in the last year.

68% of retail investor accounts lose money when trading CFDs with this provider.

8. BMO Low Volatility Canadian Equity ETF (ZLB)

While there are many low volatility ETFs focused on the US, UK and Asian markets, very few have equities exclusively from the Canadian market. Offering an opportunity to tap into a seldom explored market, this BMO fund has a very steady price range, from $33.30 to $40.63 in the last year. There is, as you can see by the chart below, however, opportunities for growth.

Currently priced at CAD $39.33, the ETF also pays a quarterly dividend, currently sitting at CAD $0.24/per share. A great investment for some needing a mixture between growth and income, it currently has a 0.39% expense ratio, higher than most others so far but maybe worth it for the growth and dividends. While not containing particularly well-known equities, with the exceptions of a few Canadian financial institutions, the ETF has produced a return of 22.75% over the last twelve months. Below, you can see a chart of its growth over the last year.

68% of retail investor accounts lose money when trading CFDs with this provider.

9. Legg Mason Low Volatility High Dividend ETF (LVHD)

Another Low Volatility High Dividend ETF, LVHD has climbed quite a bit in the last year, increasing the ETFs value by around $10. Good news for current investors but perhaps a sign that this would have been better to get in on earlier. Currently priced at $37.37, the ETF is a great one if you plan to re-invest dividends back into the fund. Returning 15.1% in the last twelve months, the stock will likely continue to grow, as dividends help increase your position in it.

A well-diversified fund, it currently has an annual dividend over $1.05, which, multiplied by an increased holding, could help you have a growing but stable portfolio. In addition, the fund contains many well-known and well-performing companies, from Pfizer to Proctor & Gamble to 3M. This stock is fairly volatile when looking at it over a day or week, however, looking at a wider view, there is definitely stable growth there.

68% of retail investor accounts lose money when trading CFDs with this provider.

10. Invesco FTSE Emerging Markets High Dividend Low Volatility UCITS ETF USD (EMHD)

Our final choice and another Low Volatility Emerging Markets ETF, this Invesco fund is geared towards dividend investors who are also looking for reasonably stable assets to invest in. The certainty provided by High Dividend Low Volatility funds means that there is still potential for growth, while avoiding the fluctuations in the valuations of individual stocks.

Tracking a FTSE Emerging Markets Index targeted at Dividend Growth, the stock, which is listed on the London Stock Exchange, is currently priced at $28.92. This price is very affordable for an entry-level investor and still attractive to those who have been investing for a while.

While being a cheaper ETF to buy, it is one of the most expensive to hold. With an expense ratio of 0.85%, it has one of the highest ratios on this list. As such, whether you invest in this fund may depend on your own strategy. Nevertheless, it has had a 29.02% return in the last year, making it a tempting investment to get the most out of your money. An amazing choice for an Emerging Markets Low Volatility ETF Find a graph of the last years performance below.

68% of retail investor accounts lose money when trading CFDs with this provider.

What is a Low Volatility ETF?

A Low Volatility ETF (Exchange Traded Fund) is a fund that is designed with low fees and stability in mind. Particularly useful to investors who need stability in times when the stock market is up and down all the time, the ETFs contain, for the most part, a broad range of stocks which is meant to stabilise (and in some cases, grow) the value of their portfolio.

While some of the best ETFs for low volatility have a minimum amount that needs to be invested to buy shares in these funds, the price of these particular types of assets are generally lower than $100. This makes them accessible to entry-level, beginner investors. However, they also appeal to long-time investors who may use Low Volatility ETFs to hedge against some of their more risky investments.

Are Low Volatility ETFs a Good Investment?

If you plan to invest for the long-term, Low Volatility ETFs are likely one of your best options for growing your portfolio. With low expense ratios, for the most part, they are priced at levels which would allow a new investor to enter the market with little capital.

In addition, while they don’t provide the astronomic returns promised by some investing strategies, with time in the market, your portfolio will grow, particularly if you choose ETFs with dividend distributions. They also allow for diversification across sectors without the volatility of buying individual stocks from those sectors. Containing some of the world’s biggest companies, ETFs are a great way to buy into these without the hefty price tag on individual stocks.

In short, yes, Low Volatility ETFs are a good investment. More than that, it could be said that they are one of the safest and cheapest ways to diversify.

Where to Buy Low Volatility ETFs

So just how do you go about buying the best low volatility ETFs? Here’s a closer look at our recommended ETF broker, eToro.

eToro – Invest in Low Volatility ETFs with 0% Commission

eToro
While Low Volatility ETFs are available from a number of brokers, we recommend eToro as a great broker to get started. With commission-free ETF trading and investing, there is very little cost and the range of assets and social network like community features which provide great insight.

Being able to also copy the portfolios of other Low Volatility ETF investors allows you to, as a beginner, make the same trades as some of the best investors on the platform. This, especially when you are starting your portfolio, means investors are able to learn from other users and copy their actions until they develop their own strategy. A great place to start for an entry-level investor. eToro is also a social trading platform that allows you to interact with other investors to discuss strategies and current trends.

Trade the best European ETFs on eToro with 0% Commission

eToro offers a huge range of different ETFs on its platform. So as well as low volatility ETFs, you can invest in the best oil ETFs, gold ETFs and much more. Best of all, eToro’s minimum deposit of just $50 means you can get started with ETF trading with very small amounts at a time.

eToro is regulated by the FCA and has over 20 million users around the world, so it’s a really trusted and secure broker. Other benefits include a wide range of payment methods including PayPal, excellent customer service, and the fantastic eToro mobile app.

Pros

  • Zero-commission ETF trading
  • Access to 17 international exchanges
  • Regulated by the UK’s FCA and several other top-tier financial authorities
  • Trade forex, CFDs, and fractional shares with the click of a button
  • Manage your portfolio anywhere at any time with the eToro mobile app
  • One of the best FCA brokers
  • Wide range of asset classes and products
  • Supports paper trading

Cons

  • Only supports USD as its base fiat currency
  • $5 withdrawal fee and $10 inactivity fee after 12 months

68% of retail investor accounts lose money when trading CFDs with this provider.

How to Invest in a Low Volatility ETF

While this may depend on the broker you are using, in eToro, our preferred ETF broker, the process is simple.

Step 1: Sign Up

Firstly, go to the eToro website and click the ‘Join Now’ button. You just need to provide some basic information like your name and email to create an account.

Open an account with eToro and invest with 0% commission

Step 2: Deposit

The minimum deposit at eToro is $50 and you can fund your account using a variety of methods, including credit card, debit card and PayPal.

Step 3: Search your ETF

Secondly, in the top search box, enter the ticker of the ETF you’d like to invest in. In our example below, we have used “SPHD” which is one of the ten ETFs we have recommended above.

Next, click on the ticker and it will take you to the page of the relevant asset. For SPHD, it looks like this.

Buy low volatility ETF on eToro

Step 4: Invest

Click on Trade and it will bring up the following screen:

Buy SPHD low volatility ETF on eToro

In eToro, it offers you the option to add leverage, a stop loss at which your position would sell and an upper limit at which to take profit, however, none of these are necessary, only optional.

Next, decide how much you’d like to buy of the ETF. There is a minimum on eToro of $50 but for beginner traders, this shouldn’t be difficult. Finally, press “Open Trade” to open a position in that ETF. It’s that simple.

Conclusion

While there isn’t one perfect Low Volatility ETF, this article gives some suggestions as to where you could put your money for the greatest stability and return on investment. Varying in expense ratio, while none are outrageous, if you are looking to have minimal impact from fees, those around the 0.2-0.3% mark are your best bet. Alternatively, a combination of a number of these, providing your broker has them, may also be a sensible strategy. For example, one focused on the UK, one on the US and one on Emerging Markets.

This is a great place to start and it is easy to build upon. For obvious reasons, it is important to do your own research and work out a strategy that works for you, however, these provide a good base on which to start.

eToro – Buy Low Volatility ETFs with 0% Commission

eToro

68% of retail investor accounts lose money when trading CFDs with this provider.

Frequently Asked Questions on Low Volatility ETFs

What is the best Low Volatility ETF?

What ETFs have Low Volatility?

Does Vanguard have a Low Volatility ETF?

Why might you need several of these within a portfolio?

About Alan Draper PRO INVESTOR

Alan is the Chief Editor of the Buyshares sites and is responsible for ensuring all the content on our site is accurate, relevant and helpful. He is an experienced editor who has worked for several leading online publications. Alan is also a writer and is an expert on the stock market.

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