Tuesday, October 18, 2016

Weekly Volatility of Stock ETFS from Vanguard for Week Ending 10/14/2016



Weekly Volatility of Stock ETFS from Vanguard for Week Ending 10/14/2016


Question:   What was the weekly ETF spread (Difference between low and high ETF price) for popular stock ETFS in the week ending 10/`14/2016?

What is the implication of this ETF for investors in stock ETFs?

Data:   I looked at the low and high over the five trading days in the week and calculated the low price as a percent of the high price.


Weekly Volatility of Eight Vanguard ETFs for Week Ending on 10/14/2016
Fund Symbol
Name
Low From 10/10/16 to10/14/16
High From 10/10/16 to10/14/16
Weekly Spread
Low as  Percent of High
VTI
Vanguard Total Stock Market Fund
108.48
111.14
2.66
97.6%
VB
Vanguard Small Cap Fund
118.07
122.21
4.14
96.6%
VV
Vanguard
Large Cap Index
96.74
99.27
2.53
97.5%
VFH
Vanguard Financial Fund
48.88
50.55
1.67
96.7%
VHT
Vanguard Health Fund
127.63
133.5
5.87
95.6%
VIS
Vanguard Industrials
107.7
110.17
2.47
97.8%
VPU
Vanguard Utilitities Fund
102.45
105.47
3.02
97.1%
VNQ
Vanguard REIT
81.64
83.99
2.35
97.2%


Discussion: The most volatile fund in the week ending 10/14/2016 of the eight funds in this sample was the Vanguard Health fund.

Only one fund – Vanguard industrial fund – had volatility less than the total market fund in this period.

Buying at the low price is the best possible outcome for the buyer.   The potential gains from shrewd or lucky purchases ranged from 2.2% to 4.4%.  (I am measuring potential gain as 100 –low price as a percent of high price.

Final thought:  The week ending on 10/14/2016 had relatively low market volatility.   In this week ETF price variability was a small but in my view non-trivial consideration for investors.  Most brokers are going to say you can’t time the market so just buy and hold but it would definitely be nice to not lose 2 to 4 percent by buying high and the lose again by selling low. 








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