The Riskalyze Report: Advisors in search of low volatility

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At the request of so many investment advisors, my friends at Riskalyze share the big trends in the assets going into and coming out of advisor portfolios every week. The underlying data is aggregated from hundreds of thousands of client accounts across the $120 billion and counting that advisors manage on the Riskalyze platform*. I hope we can uncover interesting trends for you each week…

Riskalyze

September 20th – September 26th

Winners (advisor flows TO these investments increased substantially):
  1. Pimco Income Fund (PIMIX)
  2. iShares MSCI USA Minimum Volatility (USMV)
  3. Gilead Sciences Inc. (GILD)

Losers (advisor flows FROM these investments increased substantially):

  1. Lord Abbett Short Duration Bond (LALDX)
  2. High Yield Bond (HYG)
  3. Merck and Co (MRK)

 

Josh here – Riskalyze CIO Mike McDaniel tells me that there were only 2% increases in the 3 winners as measured by week-over-week usage, yet there was a 3% decrease in usage for the listed losers. Meaning, take the winners with a grain of salt this week.

But yes, some advisors were adding to the smart beta ETF that focuses on low volatility holdings, or stocks with a beta that has been less than the overal market historically. Makes sense, we’ve been dropping pretty precipitously all month and people are naturally looking for a way to stay invested but with less drama. This may only work, however, if there is less selling pressure in the low-vol space, which may not be the case given the liquidation now currently underway.

Lord Abbet’s junk bond money market fund was sold off last week. Definitely some concerns about high-yield in general these days.

*(to state the obvious, Riskalyze does not share client sensitive data with me or use animals in testing).

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