SPLV’s portfolio analysis
The PowerShares S&P 500 Low Volatility ETF (SPLV) holds a portfolio of low-volatility stocks. It is based on the S&P 500 Low Volatility Index. The index provider selects stocks that are relatively less volatile. SPLV’s top holdings include Paychex (PAYX), PepsiCo (PEP), Republic Services (RSG), Procter & Gamble (PG), and McDonald’s (MCD).
SPLV maintains a constant portfolio of 100 stocks selected on the basis of minimal volatility. SPLV’s portfolio is majorly invested in the financial, consumer staples, and industrial sectors.
SPLV currently manages total net assets of $5.1 billion. SPLV’s 100 stocks are from the S&P 500 and have been selected on the basis of volatility. In layman’s terms, volatility is the rate of change of trend in stocks.
SPLV’s financial segment, its largest component, consists of stocks such as Plum Creek Timber (PCL), American Tower (AMT), and CME Group (CME). This sector is trading above its 20-day moving average by 1.1%. SPY’s financial segment is outperforming SPLV, trading above its 20-day moving average by 2.2%.
SPLV’s utilities segment, constituting about 6% of its total portfolio, is trading below its 20-day moving average by 5.4%. This is affecting the ETF’s market performance adversely. SPY’s utilities segment, though trading below its 20-day moving average, has seen a far more controlled drop than SPLV at 1.1%.
SPLV’s other major sectors such as healthcare, industrials, and information technology are all trading above their 20-day, 50-day, and 100-day moving averages.
In the next part of the series, we’ll explore the potential benefits of adding SPLV to one’s portfolio.