How To Ride Out Market Turbulence With These 5 Low-Beta ETFs

Author: Chandrima Sanyal | March 06, 2025 10:07am

The stock market has been under pressure due to a combination of economic slowdown fears, trade war tensions, and inflationary concerns.

Ongoing tariff escalations between major economies have disrupted global supply chains, while rising costs and slowing business activity have led to market uncertainty. Investors looking to protect their portfolios from excessive volatility may find low-beta ETFs a practical choice.

Investing in low-beta ETFs can be a smart strategy for those looking to stay in the market while minimizing risk. Beta is a measure of an asset's volatility relative to the market. A beta of less than 1 means the asset is less volatile than the broader market, providing stability during downturns. Here are five low-beta ETFs that can offer protection in uncertain times.

Also Read: Tariffs, Trump, Tumult: How To Trade The Volatility Surge

Vanguard Total Bond Market ETF (NASDAQ:BND)

• Beta: 0.20, YTD Price Return: 3%
• This ETF provides broad exposure to the U.S. bond market, covering government, corporate, and mortgage-backed securities. Bonds are generally considered safer than stocks, and with a low beta of 0.20, BND offers stability while still delivering a modest return. It is an excellent option for investors seeking income and capital preservation.

SPDR Gold Shares (NYSE:GLD)

• Beta: 0.19 YTD Price Return: 10%
• Gold is often seen as a safe-haven asset during market downturns, and the SPDR Gold Shares ETF provides direct exposure to the precious metal. With a low beta of 0.19, GLD tends to hold its value or even appreciate when equities struggle. This makes it an ideal hedge against economic and geopolitical uncertainties.

Vanguard Total International Bond ETF (NASDAQ:BNDX)

• Beta: 0.18 | YTD Return: 1%
• For investors looking to diversify globally, the Vanguard Total International Bond ETF offers exposure to investment-grade bonds outside the U.S. With a beta of just 0.18, this ETF minimizes risk while providing stability through international fixed-income securities. It's a solid choice for those seeking to balance their portfolio with low-volatility assets.

Vanguard Intermediate-Term Corporate Bond ETF (NASDAQ:VCIT)

• Beta: 0.34 YTD Price Return: 2.8%
• VCIT focuses on intermediate-term corporate bonds, offering a mix of safety and better yields than government bonds. Its beta of 0.34 is slightly higher than the others on this list, but being below 1, it still provides lower volatility compared to equity investments. This ETF is suitable for those looking for relatively stable income with moderate risk.

iShares National Muni Bond ETF (NYSE:MUB)

• Beta: 0.18 YTD Price Return: 1%
• Municipal bonds (munis) are known for their tax advantages and stability. The iShares National Muni Bond ETF invests in a diversified portfolio of U.S. municipal bonds, offering a low beta of 0.18. It is a great option for investors who want low-tax income with minimal exposure to market swings.

Also Read: Market Mayhem: 5 ETFs That Soared Amid Volatility Last Week

Why Consider Low-Beta ETFs?

The stock market has been highly volatile in recent times, driven by trade war tensions and economic slowdown fears. The ongoing tariff escalations between the U.S., Canada, Mexico, and China have led to price hikes on various goods and have disrupted global supply chains. This turbulence has made it challenging for investors to navigate the market.

Low-beta ETFs exhibit greater stability than market-sensitive assets and tend to lose less when the market declines. Though they offer lower returns compared to high-beta stocks, their defensive nature makes them a reliable choice during economic uncertainty.

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Posted In: BND BNDX GLD MUB VCIT