The Riskalyze Report: Advisors Dump “Low Vol”

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

May 29th – June 4th

Winners (advisor flows TO these investments increased substantially):
  1. Nasdaq 100 (QQQ)
  2. S&P Small-Cap (IJR)
  3. US Mid Cap (VO)

Losers (advisor flows FROM these investments increased substantially):

  1. 3-7 Year Treasury Bond (IEI)
  2. MSCI USA Minimum Volatility (USMV)
  3. FS Investment Corporation (FSIC)

According to CIO Mike McDaniel, “Advisor use of QQQ increased 6% week over week.” The Nasdaq 100 is the lagging major average this year, btw.

Minimum volatility got the heave-ho, possibly as a consequence of all the negative media attention for a strategy that purports to offer equity upside without the possibility of large drawdowns. Everyone should know better than to use this term. Jeff Gundlach said “Tort lawyers, clip these ads and save for future use.” Nick Murray just shredded the notion of low-vol in his widely read newsletter for June.

Message received.

In case you missed it, here’s what I said about the Low Volatility craze the other day: Everything you need to know about sentiment right now 

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

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