Low-volatility equity portfolios aim to deliver a material reduction in volatility (i.e. price fluctuations of your investment) while generating long-term returns that are comparable to traditional equity indices.
Why Consider a Low-Volatility Approach?
- A smoother ride – Low-volatility equity portfolios aim to deliver the long-term returns of equities, but with more stable price movements.
- The low-volatility anomaly – A large number of studies over the last 20 years have revealed a surprising result: over the long term, low-risk stocks delivered higher returns than high-risk stocks.
- Winning by not losing – Low-volatility portfolios tend to have smaller losses in down markets and can recover more quickly than higher-risk portfolios, which can suffer larger declines.
Smaller Losses Reduce the Need for Big Gains
The chart below shows how minimizing losses can make for an easier recovery. A loss of 20% requires a 25% gain to get back to even, while a loss of 50% requires a 100% gain to get back to even.
Why RBC QUBE Low Volatility Equity Funds?
- Emphasis on stability, quality and growth – RBC QUBE Low Volatility Equity Funds focus on companies with stable earnings and cash flows, strong financial positions and relatively stable stock prices.
- Attractive yield – RBC QUBE Low Volatility Equity Funds will often have a higher dividend yield than their market indices.
- Active management by a highly experienced team – The Funds are actively managed by the Quantitative Investment team, led by Bill Tilford, who brings with him a decade and a half of experience managing very large Canadian and global equity portfolios using quantitative processes.
Three funds for you to choose from:
- RBC QUBE Low Volatility Canadian Equity Fund
- RBC QUBE Low Volatility U.S. Equity Fund
- RBC QUBE Low Volatility Global Equity Fund
To find out more about the RBC QUBE Low Volatility Equity Funds, call us at 1-800-661-6141 to speak with an Investment Funds Advisor.