Key Points
-
All three of these ETFs are beating the market by a wide margin so far in 2026.
-
They invest in stocks that perform well in market downturns.
March has been volatile thus far, with S&P 500 down about 3% for the month as of March 18. It is the continuation of negative market sentiment that began forming in late 2025. The March decline has been fueled by uncertainty around the war in Iran and rising oil prices. Also, still elevated inflation and a weak job market have contributed to investor jitters.
Investors who want to balance out their portfolios and navigate choppy markets might want to consider an exchange-traded fund (ETF) that is built to thrive in down markets.
Will AI create the world’s first trillionaire? Our team just released a report on the one little-known company, called an “Indispensable Monopoly” providing the critical technology Nvidia and Intel both need. Continue »
A person looking at stock returns on video screens, with their arm extended toward it.
Image source: Getty Images.
Here are three ETFs built to handle volatile markets.
1. Franklin International Low Volatility High Dividend ETF
The Franklin International Low Volatility High Dividend Index ETF (NYSEMKT: LVHI) has outperformed the broader market by a wide margin this year. The ETF is up 8.3% year to date as of March 18, offsetting negative returns for the Nasdaq Composite and S&P 500.
Its outperformance in this market stems from its diversification away from large-cap U.S. equities. The ETF focuses on international stocks that have high dividends, low volatility, and sustainable earnings.
It holds about 185 mostly large-cap and mid-cap international stocks from some 19 different developed nations. Stocks from Canada, Japan, and the U.K. have the most representation. Shell, Novartis, and Suncor Energy are among its largest holdings. The ETF is weighted by its proprietary stable yield score.
The ETF is up 30% over the past 12 months with the dividend reinvested and has averaged a 16.7% return over the past five years.
2. Franklin U.S. Low Volatility High Dividend ETF
The Franklin U.S. Low Volatility High Dividend ETF (NASDAQ: LVHD) is an attractive option right now for the same reason as its sister ETF, LVHI. The only major difference is that it focuses on low-volatility, high-dividend stocks from the U.S. Low volatility means those with low price and earnings volatility, which makes them more stable in various market conditions.
Further, high dividends mean the company is consistently churning out steady earnings to support its dividend, no matter the environment.
This ETF contains about 115 large- and mid-cap stocks with utilities and consumer staples, the two largest sectors. The top three holdings are Verizon Communications, Chevron, and American Electric Power.
This ETF is trading up about 7.2% year-to-date. It has a one-year total return of 11% and a five-year annualized total return of 8.4%.
3. Vanguard Consumer Staples ETF
The Vanguard Consumer Staples ETF (NYSEMKT: VDC) invests in companies that produce products that consumers need in any type of market or economy.
These are called consumer staples, and they include stocks like Walmart, Costco Wholesale, and Procter & Gamble. These are companies that own low-cost or bulk shopping centers, or basic food items that people eat every day. Overall, it tracks an index of roughly 104 consumer staples stocks from across the market cap spectrum.
The ETF has returned about 7% year-to-date and roughly 9.1% over the past year with the dividend reinvested. Over the past five years, it has generated an annualized return of 8.4%.
These may not be blowout numbers, but in a down market, the positive returns should provide some nice balance in your portfolio.
Should you buy stock in Legg Mason ETF Investment Trust – Franklin International Low Volatility High Dividend Index ETF right now?
Before you buy stock in Legg Mason ETF Investment Trust – Franklin International Low Volatility High Dividend Index ETF, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Legg Mason ETF Investment Trust – Franklin International Low Volatility High Dividend Index ETF wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $495,179!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,058,743!*
Now, it’s worth noting Stock Advisor’s total average return is 898% — a market-crushing outperformance compared to 183% for the S&P 500. Don’t miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of March 22, 2026.
Dave Kovaleski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chevron, Costco Wholesale, and Walmart. The Motley Fool recommends Verizon Communications. The Motley Fool has a disclosure policy.