It has been quite a ride for a fund composed of the market's tamest stocks. But now, just as imitators are proliferating, some experts think this popular exchanged-traded fund could be sinking back to earth. The ETF, PowerShares S&P 500 Low Volatility, is loaded with stocks any grandparent could love: Kellogg, Coca-Cola (KO: 75.23, -0.33, -0.44%) and Procter & Gamble (PG: 62.49, -0.08, -0.13%), among others. And this stodgy-seeming play is the hottest ETF to hit the market in the past year.
The fund is supported by a growing body of academic and industry research that indicates a classic Wall Street paradigm -- that buying safe, well-established companies means sacrificing long-term gains -- is false. Advocates say the research shows that investors in the least volatile stocks would have fared as well or better than those who put their faith in riskier names, suggesting that many of the market's most gut-wrenching ups and downs are unnecessary punishment.
Source: Smart Money
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