As mentioned above there will be more of these low volatility funds because there is investor demand for them but it is important to realize that in a fast move up, the low volatility funds will lag behind. Since the Oct. 4 low EEM is up 17% vs. 12% for DEM and 8% for HILO. Getting frustrated with that sort of month and swapping now would be very shortsighted considering the reasons to have bought a low vol fund in the first place. If there is to be any benefit to using the low volatility ETFs it will be over the course of an entire stock market cycle.
At the time of publication, Nusbaum held no positions in any of the funds mentioned, although positions may change at any time.

Roger Nusbaum is a portfolio manager with Your Source Financial of Phoenix, and the author of Random Roger's Big Picture Blog. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Nusbaum appreciates your feedback; click here to send him an email.

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