These low-volatility funds offer stability when the Dow swings by 1,000 points

Published Fri, May 6 202211:06 AM EDT

As stocks continue their wild swings, CNBC Pro found several low volatility funds that can offer investors some stability in a violent, up-and-down market. On Friday, stocks continued to suffer after a steep sell-off Thursday, when the Dow Jones Industrial Average lost more than 1,000 points, and the Nasdaq Composite slumped 5%, both posting their worst day since 2020. Meanwhile, the VIX Index — often referred to as the measure of investor fear — topped 30, up more than 5%. CNBC Pro found several low-volatility ETFs that can help portfolios outperform while also offering investors some stability to weather the storm, according to data from Morningstar. One fund also focuses on companies that post steady dividends. All funds beat the S & P 500. One fund is up as much as 5.9% over the 12 months through Thursday's close, while the broad market index is down 1.3% in the same period. Here are five funds that offer investors some stability: The Invesco S & P 500 High Div Low Vol fund (SPHD) is the top-performing ETF this past week. The low volatility fund, which has $4 billion in assets under management, also focuses on companies with high dividend yields. The SPHD returned 1.6% week to date through Thursday's close, and 3.9% over the past 12 months. The fund carries a 0.3% expense ratio. Energy companies listed in SPHD's top 10 holdings have outpaced the major averages year-to-date. So far in 2022, Williams Companies gained 37%, Kinder Morgan climbed about 18% and Chevron jumped 42%. Moreover, they also generate strong dividend yields. Williams Companies offers a 4.7% dividend yield, Kinder Morgan pays 5.9% while Chevron returns 3.4%. A couple of tobacco companies are also listed among the fund's holdings. Altria and Philip Morris International returned 18% and 4% so far this year. Both firms also pay hefty dividends of 6.4% and 5.1%, respectively. A different fund was the top performer this past year. The Invesco S & P 500 Low Volatility fund lost 0.4% over the past week through Thursday's close, but returned 5.9% over the past 12 months. The fund, with $9.9 billion in assets and a 0.25% expense ratio, has a four-star rating from Morningstar. The fund's top holdings include major consumer-facing companies, including Hershey , Coca-Cola , Johnson and Johnson , and Walmart . The top 10 holdings account for about 12.8% of the fund's total holdings, according to FactSet. Other low volatility funds include SPDR Russell 1000 Low Vol Focus , the SPDR SSGA US Large Cap Low Vol , and First Horizon Managed Volatility Domestic .

Traders on the floor of the New York Stock Exchange, April 27, 2022.

Source: NYSE

As stocks continue their wild swings, CNBC Pro found several low volatility funds that can offer investors some stability in a violent, up-and-down market.

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These low-volatility funds offer stability when the Dow swings by 1,000 points

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