We’re just a few months away from 2026 and the stock market is already on a rollercoaster ride. The war in Iran, rising oil prices and rising inflation are putting pressure on the economy and consumers. He CBOE Volatility IndexAlso called VIX, it is up 73% since the beginning of the year, indicating that investors are nervous and expect more volatility in the future.
It’s impossible to completely avoid volatility when investing in stocks, but you have some good options if you want to stay in the market but reduce some of the biggest price swings. Here are three exchange-traded funds (ETFs) that can help you avoid some of the turbulence.
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If your goal is to minimize volatility, the iShares MSCI US ETF with Minimum Volatility Factor (NYSEMKT:USMV) It is the way to go. The volatility of a stock is measured by its beta, and the S&P 500 has a beta of 1. This fund has a beta of only 0.55, significantly lower than the broader market.
The fund aims to reduce your risk, so your portfolio has fewer price swings and you will benefit from a low expense ratio of just 0.15%.
Through the fund it will invest in around 170 companies, including exposure to Waste management, ExxonMobiland Berkshire Hathaway. If you’re worried about missing out on some of the biggest trends with a minimum volatility fund, you can have it both ways with this one as it also invests in AI leaders including NVIDIA and microsoft.
Another ultra-low volatility fund is the Invesco S&P 500 Low Volatility ETF (NYSEMKT: SPLV)which invests in the 100 S&P 500 stocks with the lowest volatility over the last 12 months. Your money will be spread across a wide range of sectors, including utilities, real estate, consumer goods, financial companies, and healthcare.
Diversity is an important part of this fund, but so is the fact that the companies it will invest in are very low volatility stocks, including Southern Company., Real estate incomeand Johnson & Johnson. While its expense ratio of 0.25% is higher than the expense ratio of the iShares MSCI US Maximum Volatility Factor ETF, it is still lower than the industry average of about 0.34%.
Another angle to play among low-volatility stocks is to focus on companies that sell things that everyone buys all the time, no matter what’s happening with the economy. One of the best ways to do this is to own the State Street Consumer Staples Select Sector SPDR® ETF (NYSEMKT:XLP).