After a prolonged rally throughout much of 2025—even in the face of mounting geopolitical uncertainty, shifting tariff policies, and more—the S&P 500 has cooled its momentum early in 2026. With the market moving increasingly erratically, the S&P is down about 2% year-to-date (YTD) overall. Investors may be feeling that they can no longer rely on a continued upward trajectory.
When volatility looms, a defensive exchange-traded fund (ETF) can provide greater stability. ETFs screening potential holdings for volatility factors may be able to identify and target companies better able to hold steady even as the broader market environment shifts. Other funds seek out alternative metrics to find stable companies, including measures of success like impressive free cash flow. The funds below provide not only a defensive play for investors concerned about volatility this year, but also an opportunity to win some growth at a time when the broader market may be faltering.
