3 Best ETFs to Kick Volatility to the Curb

Volatility is simply a measurement of an asset's up and down moves. And when people start talking about stock market volatility, it's usually because volatility is high—a poor environment for most equities.

That's why, when the market starts to rumble, investors look for ETFs designed to reduce the amount of volatility they're exposed to.

Today, I'll talk about a few top-tier low- and minimum volatility ETFs to buy.

Disclaimer: This article does not constitute individualized investment advice. Individual securities, funds, and/or other investments appear for your consideration and not as personalized investment recommendations. Act at your own discretion.

Watch Out for High Volatility

As a general rule, if stocks spend a prolonged time moving up and down by more than 1% per day, your average market watcher would likely tell you that stocks are volatile.

That doesn't sound so bad in a bubble. Stocks could theoretically go down 1%, then up 3%, then down 1%, then up 3%, and hey, you'd have some nice gains in a volatile market. But that's rarely how it plays out in practice. 

Crestmont Research evaluated S&P 500 Index data from 1962 through the end of 2025, measuring performance across four different quartiles of annual volatility. Here's a look at a few stats from each quartile (volatility range in parentheses):

• 1st Quartile (0%-1.0%): 94% chance of an up year, 18.2% average gain in up years, 1.5% average loss in down years, expected gain of 17.0%
• 2nd Quartile (1.0%-1.4%): 75% chance of an up year, 14.6% average gain in up years, 6.3% average loss in down years, expected gain of 9.4%
• 3rd Quartile (1.4%-1.7%): 88% chance of an up year, 17.3% average gain in up years, 5.9% average loss in down years, expected gain of 14.4%
• 4th Quartile (1.7%-2.7%): 38% chance of an up year, 15.1% average gain in up years, 18.6% average loss in down years, expected loss of 5.9%

It's not a perfect line. But broadly speaking, years with low volatility were more likely to be positive (and when they weren't, the damage was relatively more contained) than years with high volatility. Up years could be more productive during periods of relatively high volatility, but they were less productive when the markets were extremely volatile.

Why? The oversimplified but directionally correct answer is "markets hate uncertainty." Big swings up and down are an indication that investors aren't all on the same page about where stocks and other investments should be priced. It's also a risky environment in which to invest—people get a little skittish about the possibility of buying something that could lose 3% or 4% the very next day!

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The Best Low- and Minimum-Volatility ETFs You Can Buy

Hopefully, you know quite a bit more about volatility, as well as the logic behind low- and min-vol strategies, than you did a few minutes ago. And if you'd like to learn even more, I have a few more thoughts, which I'll share with you a little later.

Now that you have some knowledge to work with, let's take a look at a few picks from my larger selection of the best low- and minimum-volatility ETFs you can buy.

Invesco S&P 500 Low Volatility ETF

• Style: U.S. low-volatility large-cap stock
• Assets under management: $7.1 billion
• Dividend yield: 2.2%
• Expense ratio: 0.25%, or $2.50 per year on every $1,000 invested

I'll start with one of the largest volatility-specific funds of any sort: the Invesco S&P 500 Low Volatility ETF (SPLV), which is currently responsible for more than $7 billion in assets under management (AUM).

This straightforward index fund tracks the S&P 500 Low Volatility Index, which starts with the S&P 500's components, narrows it down to the hundred components with the lowest realized volatility over the past 12 months, then "weights" each stock based on its lack of volatility. (Weighting refers to the percentage of fund assets invested in something, be it an asset, industry, sector, country, etc.)

Related: 10 Monthly Dividend Stocks for Frequent, Regular Income

Right now, this construction method has built a portfolio that's high on utilities (25%), financials (21%), real estate (18%), and industrials (11%). The utility sector's dominance over the past couple months have brought names such as FirstEnergy (FE) and Duke Energy (DUK) into the top holdings. However, the fund is also loaded with blue chips from across the market, including Dividend Kings Coca-Cola (KO) and Johnson & Johnson (JNJ).

So, what about that low volatility? Let's look at beta, which is a common measure of volatility that compares an investment to a benchmark. For stocks, the benchmark is typically the S&P 500, and the benchmark is set at 1. A beta of less than 1 implies something is less volatile than the benchmark; a beta of more than 1 implies more volatility. SPLV has a beta of 0.40 right now, which implies that the ETF is less than half as volatile than the broader stock market. 

That low volatility hasn't always worked out during downturns (see: the COVID bear market), but it usually has, especially during longer periods of market sluggishness. 

For instance, during the 2022 bear market, Invesco S&P 500 Low Volatility only lost 15% compared to 24% for the S&P 500. It fared very well during 2025's near-bear market, declining by just about 6% between the Feb. 19 market high and April 8 market low, while the S&P 500 lost nearly 20%. And in 2026, SPLV outperformed the index, 4% to -4%, across a first quarter in which the S&P 500 was flat for the first two months before diving in March.

If you want straightforward protection tethered to the U.S. stock market, Invesco's fund is one of the best low-volatility ETFs you can buy.

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Vanguard U.S. Minimum Volatility ETF

• Style: U.S. minimum-volatility large-cap stock
• Assets under management: $431.6 million
• Dividend yield: 1.9%
• Expense ratio: 0.13%, or $1.30 per year on every $1,000 invested

A reminder: Low-volatility ETFs try to buy stable stocks. Minimum-volatility ETFs try to buy stocks that produce a stable portfolio. It's a subtle difference, but the Vanguard U.S. Minimum Volatility ETF (VFMV) aptly expresses it (emphasis mine):

"[The] Fund invests in stocks that together have the potential to generate lower volatility than the broad U.S. equity market."

Related: 8 Best Wealth + Net Worth Tracker Apps [View All Your Assets]

Unlike many low- and min-vol strategies, VFMV isn't index-based, but actively managed. Manager Scott Rodemer tries to achieve minimum volatility by investing across stocks of all sizes, market sectors, and industry groups, while also trying to limit exposure to stocks with relatively low liquidity.

A great illustration of how low- and min-vol strategies take different paths is to look at how SPLV and VFMV differ from their benchmarks in how they hold stocks in the volatile technology sector.

• SPLV: ~2% tech (vs. ~39% for the S&P 500)
• VFMV: ~25% tech (vs. ~35% for the Russell 3000)

Sure, VFMV's tech exposure is 10 percentage points behind its benchmark. But technology is the greatest weight (by far!) in VFMV at the moment, and much more exposure than you get in the SPLV.

Rodemer believes he can achieve lower volatility through a more balanced portfolio. It's not perfectly balanced, as you'd guess from the technology allocation, but the asset spread is better than the Russell 3000. VFMV has four sectors with double-digit exposure, but also another four with high-single-digit exposure.

Currently, VFMV has a beta of 0.55—so Vanguard has built a portfolio that's a little more volatile than SPLV, but still considerably less wobbly than the broader market.

Vanguard U.S. Minimum Volatility came to life in 2018, so it doesn't have a long track record. But thus far it has delivered defense in downturns and better upside than SPLV in up markets. Morningstar gives the fund a Bronze Medalist rating, citing low costs and the fact that "managers have shown skill in their allocation of risk."

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Franklin International Low Volatility High Dividend ETF

• Style: International low-volatility dividend stock
• Assets under management: $5.0 billion
• Dividend yield: 3.7%
• Expense ratio: 0.40%, or $4.00 per year on every $1,000 invested

The Franklin International Low Volatility High Dividend ETF (LVHI) helps us cover our bases on a couple of fronts: It helps us target lower volatility in the international portion of your portfolio, and it demonstrates how dividends can be helpful in providing stability.

Here's how LVHI builds its 193-stock portfolio:

The fund starts by reviewing the MSCI World ex-US IMI Index, which is made up of more than 3,000 stocks of all sizes across numerous countries. It uses a proprietary screen to identify "profitable companies that have the potential to pay relatively high sustainable dividend yields." It then scores those dividend stocks based on price and earnings volatility; higher-scoring stocks get larger weightings.

Related: 14 Best Investing Research & Stock Analysis Websites

But there are constraints. Every quarter, the fund rebalances so that no stock accounts for more than 2.5% of assets, no sector accounts for more than 25% (except real estate investment trusts [REITs], which can't exceed 15%), no country accounts for more than 15% of assets, and no individual geographic region exceeds 50%.

For instance, right now, Canada is the greatest country weight at 16%, followed by Japan (15%) and the U.K. (14%). Financials are the largest sector allocation at 22% of assets, followed by energy (18%), industrials (12%), and utilities (11%). Top holdings include the likes of oil-and-gas firm Canadian Natural Resources (CNQ), British oil giant Shell (SHEL), and Australian miner Rio Tinto (RIO).

A reliance on international large caps results in a fine yield that's three times more than what the S&P 500 offers right now. Those dividends represent returns that are largely separated from price—even if the stocks themselves don't perform well, LVHI's nearly 4% in dividends can help make up for a little of that shortfall.

Franklin's low-vol international fund isn't terribly old, having hit the market in 2016. But it has performed well so far, outdoing 99% of its large-cap foreign-stock peers over the past five years. That includes a positive return in 2022 when competitors in its category were down 9% on average, slightly better performance than broader international indexes during 2025's downturn, and significant outperformance against those same indexes year-to-date in 2026.

Morningstar also likes LVHI's prospects going forward, citing its "impressive long-term risk-adjusted performance" and "cost advantage" in awarding the fund its Bronze Medalist rating.

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