Low-Volatility ETF USMV Reduced Losses but Gave Up $131,460 in Growth on $300,000
From October 2021 to October 2026, USMV's largest peak-to-trough decline was 8.91%, while VOO's was 11.98%, with both lows occurring in early April 2025. A $300,000 investment in USMV grew to $440,310, while the same amount in VOO reached $571,770, a difference of $131,460. The article argues the reduced volatility was worthwhile only for an investor who would have sold during VOO's decline.
USMV is the iShares MSCI USA Min Vol Factor ETF; VOO is Vanguard's S&P 500 ETF. Over the comparison, USMV's worst high-to-low loss was 8.91%, versus 11.98% for VOO, with both lows in early April 2025. Dividend-adjusted returns were 46.77% and 90.59%, respectively.
The lower-volatility fund's daily standard deviation was 0.778%, compared with 1.065% for VOO, and their daily returns correlated at 0.82. USMV's holdings leaned toward utilities, telecom, waste, insurance, and pharmaceuticals, while VOO had 38% information technology and 2.2% utilities.
This comparison may influence how retirement savers, advisors, and ETF investors weigh downside protection against long-term gains. Investors who prioritize avoiding steep losses could accept lower returns, while those with longer horizons may see the cost of comfort as significant. The example could prompt more scrutiny of fund selection and risk tolerance, though it does not predict future performance or suit every portfolio.