Low-volatility equities

Low volatility can be measured in two ways. The first is standard deviation, which measures the volatility of each stock in isolation, and the second is beta, which measures the volatility and correlation of a stock relative to the market as a whole. The market has a beta of 1, so a stock with a beta below 1 is considered less volatile than the market, and vice versa for a stock with a beta above 1.

Below are the top-rated low-volatility stocks based on a volatility composite. Many managers have adopted this strategy, which consists of beating the markets in contractionary (bearish) phases and rising in line with the market in expansionary (bullish) phases. This may seem counter-intuitive to many investors, but stocks that are less volatile than their peers have historically produced comparable or superior returns. This means that, on a risk-adjusted basis, low-volatility stocks have been superior investments.