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Low-volatility portfolio a good choice for the Thai Stock Market

GLOBAL STOCK MARKETS continue to climb to fresh highs as investors are upbeat on the improving growth outlooks in the United States, China, and much of the rest of the world. However, a number of investors have begun to be cautious on how much further the markets can rise and shift towards low volatility portfolios. Market valuations are at the higher end of a historical range.


Assuming that market corrections will begin, investors will rush into a defensive strategy, as they have done in every market down-cycle. We believe it might be a good time for risk-averse investors to think about getting into low-volatility stocks in an effort to limit the downside while capturing a significant portion of the upside.

One choice for overseas investment exposure might by iShares Edge Minimum Volatility exchange-traded funds. According to statistics provided by BlackRock, these minimum-volatility ETFs capture a large part of the market gains while the downsides are significantly lower. For instance, the iShares Edge MSCI Min Vol USA ETF (USMV) invests in 185 stocks with low volatility such as AT&T, Johnson & Johnson, McDonald’s Corp, and Procter & Gamble.

When the market was down, the ETF lost only 49 per cent of the broad market. On market gains, the portfolio captured as much as 78 per cent of the gains. The statistics could deviate from these numbers in the short term but should not be significantly off track in the longer term. The ETF has an expense ratio of only 0.15 per cent, considerably lower than traditional mutual funds.


Joe Miller
the authorJoe Miller
I have been living in Thailand for over 20 years, witnessing the remarkable changes the country has undergone since the Asian Financial Crisis. Throughout my time here, I have lived Phuket, Samui, Hua Hin, and Chiang Mai, but ultimately, I always find myself returning to the bustling city of Bangkok. This dynamic metropolis served as the perfect setting for me to run a software development company and teach at universities. Nowadays, I embrace the digital world, with Bangkok as my home base. My unwavering belief in the enormous potential of Thailand and its people inspired me to create Thaivest. Through this platform, I aim to help individuals from around the globe discover how to thrive and make a fulfilling living in this captivating country.

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