Of the scores of exchange traded funds that came to market last year, the Invesco QQQ Low Volatility ETF (QQLV) is one worthy of a “peacock” moment or two.
When QQLV debuted last December, it was arguably impossible to forecast at that time just how well-timed the ETF would be. Fast-forward just weeks from QQLV’s launch and it became clear that, amid President Trump’s tariff bet, the low-volatility factor could be a 2025 star.
Four months into the year, that speculation is now fact. The low volatility factor is doing its job — keeping investors relatively safe from broader market downturns — and on that note, QQLV should take a bow. As of April 29, the Invesco ETF is up 4% year-to-date, which is obviously vastly superior to the 5.42% shed by the S&P 500.
QQLV Ready for the Moment
History confirms the validity of minimum volatility as a factor. During the trying markets of 2018 and 2022, low volatility was the second-best and the top factor on annual basis. QQLV wasn’t around then, but it’s not a stretch to assume that had it been, the ETF would have, at the very least, delivered returns that were less bad than those of the S&P 500.
“Limiting losses is key to the long-term success of the ‘low-volatility factor,’ which isn’t necessarily about beating the market, but more about producing superior risk-adjusted returns,” noted Morningstar’s Dan Lefkovitz. “Why does the factor work? According to academic research going back decades, volatile stocks become overbought. They attract both professional investors desperate to beat their benchmarks and individuals chasing their potential.”
For those seeking further confirmation of the credibility of minimum volatility investing, remember that Warren Buffett once said the following: “The first rule of an investment is don’t lose [money]. And the second rule of an investment is don’t forget the first rule.”
Speaking of Buffett, QQLV is home to a couple of stocks found in Berkshire Hathaway’s equity portfolio and several others that are comparable to investments held by the conglomerate. QQLV may be shining this year due to value and dividend exposure as well. It allocates nearly a quarter of its weight to value stocks, and many of its holdings are reliable dividend growers.
“Low volatility isn’t the only factor that has gone from zero to hero in 2025, at least in relative terms. Value, yield, and size have all lost less than the market so far in 2025 after having lagged in 2023 and 2024,” added Lefkovitz.
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