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Low volatility ETFs show their faults Add to ...

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So much for the idea that you could get premium returns from stocks with reduced risk.

Low-volatility exchange-traded funds had a great run of doing exactly this. The BMO Low Volatility Canadian Equity ETF (ZLB) had a cumulative return of 85.5 per cent for the five years to Nov. 24, while the BMO S&P/TSX Capped Composite Index ETF (ZCN) made 32.3 per cent. But lately, the low volatility strategy has lagged. ZLB was up 5.5 per cent for the past 12 months, while ZCN was up 12.3 per cent.

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