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Additional Reading from MarketBeat Media
3 Low-Volatility ETFs for Peace of Mind in Turbulent TimesSubmitted by Nathan Reiff. Article Published: 4/13/2026.
Key Points
- ETFs aiming for low volatility can take multiple approaches, including screening for stocks that are less susceptible to market turbulence or focusing on bonds.
- LVHI is a rare low-volatility fund that has a strong track record of performance YTD on top of a healthy dividend yield of around 4%.
- JEPI's overlayed options approach on top of a low-volatility S&P 500 stock strategy has caused its dividend yield to soar above 8%.
- Special Report: Elon’s “Hidden” Company
Amid uncertainty over the trajectory of the war in Iran, the possibility of a continued ceasefire, and the potential impact on oil prices and the broader market, many investors are understandably seeking stability. In volatile times, it can make sense to consider exchange-traded funds (ETFs) designed to deliver lower volatility. Under normal circumstances — and certainly during a bull run — investors might generally avoid low-volatility ETFs except as a defensive holding. These funds are designed to move less than the market, which means they can lag when markets rally. But when turbulence threatens to erase years of gains, low-volatility ETFs can help protect capital and preserve returns. LVHI Offers Both a Strong Dividend and Defense Against VolatilityThe Franklin International Low Volatility High Dividend Index ETF (BATS: LVHI) tracks an index of equities chosen for their combination of high dividends, steady earnings and low volatility. The portfolio typically includes about 50 to 150 stocks, allowing flexibility as names move in and out of the screening criteria.
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LVHI focuses exclusively on stocks based in developed markets outside the United States, so it can provide useful diversification for investors with a domestic bias. Many of the top holdings — such as energy sector giant Shell PLC (NYSE: SHEL) and pharmaceutical leader Novartis (NYSE: NVS) — may already be familiar to many investors. Despite its low-volatility mandate, LVHI has delivered notable performance in 2026, gaining nearly 12% year-to-date. Its 4.1% dividend yield reflects its emphasis on higher-yielding names, offering a combination of income and downside mitigation. Its expense ratio of 0.40% is reasonable given that performance. A Combination of Low-Volatility S&P Names and Call Options for IncomeThe JPMorgan Equity Premium Income ETF (NYSEARCA: JEPI) pursues a different path: it selects lower-volatility S&P 500 stocks and overlays a covered-call options strategy to generate monthly distributions. The call overlay can limit upside in a strong rally, but it helps produce steady income, which is central to the fund’s objective. JEPI is actively managed and charges a 0.35% annual fee. It has produced an attractive dividend yield of 8.3%, reflecting the effectiveness of its options-overlay approach. The fund’s portfolio of more than 100 stocks draws from the S&P 500, making its yield particularly appealing relative to other equity-focused income funds. Unsurprisingly given its income focus, JEPI has not prioritized long-term capital appreciation. That said, it has slightly outperformed the S&P 500 year-to-date, gaining just under 1%. A Middle-of-the-Road Approach to Balancing Bond Yields and RiskFor investors who prefer to avoid equities during uncertain times, intermediate-term Treasurys offer another way to reduce volatility. The iShares 7-10 Year Treasury Bond ETF (NASDAQ: IEF) holds intermediate-duration U.S. Treasurys, a segment that balances interest-rate sensitivity and yield. It’s not the most conservative bond fund, but it can strike a useful balance for those willing to accept moderate rate risk. IEF currently delivers a 3.8% dividend yield and charges a modest 0.15% expense ratio. Interest-rate risk and market volatility are distinct but related concerns; short-term market swings may not immediately affect Treasury yields, but rates can influence bond prices over time. IEF’s risk/yield profile may suit many investors. Those seeking to further minimize interest-rate sensitivity might consider shorter-duration Treasurys. For example, the iShares 1-3 Year Treasury Bond ETF (NASDAQ: SHY) targets a shorter slice of the Treasury market and charges the same annual fee; its dividend yield currently sits around 3.7%. |
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