Thanks a lot for these details. One more question. What does risk category tells us. I saw the risk category for stocks as well but was not sure how to understand/evaluate it. Is there ETFs in green or with very low risk? Also, I thought ETFs are much lower risks that individual stocks because they do not depend on one or two companies/tickers. What are the reasons to show them in yellow or even red for VWRD above?
VHYD and VWRD ETF
- Thread starter Alver
- Start date
Their risk metric, here, is the 1 Year volatility.
The greater the annual volatility, the riskier the ETF.
They probably have a basket of ETF and 18% volatility is on the riskier side of the spectrum.
Some ETF have very low volatility such as those tracking yields, bonds & such.
Looks like the SPY has a 12 Month realized volatility of 24%
VHYD and VWRD are then less risky than the SPY
Meaning they have smaller swings % wise.
ETF are generally less risky than stocks.
Even if we can find less volatile stocks than the ETF itself,
Since the ETF is a basket of stocks then it will average everything out.
Obviously some constituents are going to be above or below the average.
The greater the annual volatility, the riskier the ETF.
They probably have a basket of ETF and 18% volatility is on the riskier side of the spectrum.
Some ETF have very low volatility such as those tracking yields, bonds & such.
Looks like the SPY has a 12 Month realized volatility of 24%
VHYD and VWRD are then less risky than the SPY
Meaning they have smaller swings % wise.
ETF are generally less risky than stocks.
Even if we can find less volatile stocks than the ETF itself,
Since the ETF is a basket of stocks then it will average everything out.
Obviously some constituents are going to be above or below the average.