Investing in ETFs Amid Market Volatility: Strategies for 2025
After a period of uncertainty, investor anxiety is rising. As of March 3, the VIX “fear” index has reached its highest level so far in 2025. Investors are reacting to an inverted yield curve in Treasury rates, concerns about a possible recession, and uncertain tariff policies from the Trump administration. In addition, falling consumer confidence has added to the market’s volatility. Amid these challenges, exchange-traded funds (ETFs) can serve as a safe haven and a means to diversify portfolios to guard against market headwinds.
For investors hoping to broaden their ETF investments this year, several defensive strategies aim to minimize risk during tumultuous times. Some more adventurous investors might also seek out underappreciated ETFs—those performing well in 2025, yet managing assets of $25 billion or less. While not the most obscure options, these ETFs are often overshadowed by more popular funds.
High Dividends and Global Exposure: iShares MSCI EAFE Value ETF
The iShares MSCI EAFE Value ETF (BATS: EFV) is an option for investors looking for equities from outside North America. This ETF focuses on Europe, Australia, Asia, and the Far East (EAFE), targeting companies that exhibit value characteristics, such as low pricing multiples.
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Value stocks have performed well early in 2025, and EFV anticipates this trend to continue, particularly outside the U.S. and Canada.
An attractive feature of EFV is its diverse portfolio, consisting of nearly 450 holdings. While about 34% of the fund is allocated to financials, it encompasses various sectors. Though companies from Japan, the United Kingdom, and France dominate the fund, EFV includes firms from over a dozen countries.
EFV’s portfolio contains several high dividend yielders, contributing to its annual dividend yield of 4.29%. As of March 3, EFV has risen roughly 11% in 2025, contrasting with the S&P 500’s slight decline of 0.3% over the same timeframe.
SPDR S&P World ex-US ETF: Low-Cost Global Exposure with Strong Returns
Investors seeking a broader, lower-cost alternative to EFV may want to look at the SPDR S&P World ex-US ETF (NYSEARCA: SPDW).
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SPDW has an incredibly low expense ratio of 0.03%, compared to EFV’s 0.33%, making it one of the cheapest ETFs available.
This fund has a broad investment approach, holding a large portfolio of large-cap developed international stocks, offering diversified exposure to nearly 5,000 equities without a specific geographic or sector focus. SPDW appears to be a solid choice when global markets are doing well, especially if U.S. markets are struggling. So far, this year, SPDW has achieved nearly 8% returns by March 3.
iShares Core High Dividend ETF: Steady Income from U.S. Equities
The iShares Core High Dividend ETF (NYSEARCA: HDV) differs from the previous funds by concentrating on U.S. equities, specifically targeting undervalued large-cap stocks that pay dividends.
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HDV features 76 companies, including major brands like Johnson & Johnson (NYSE: JNJ) and Procter & Gamble Co. (NYSE: PG).
These companies are well-established and are expected to remain resilient despite economic challenges, making them attractive for their consistent dividend history.
With an annual dividend yield of 3.44%, HDV has performed well amid market fluctuations, registering a gain of over 7% year-to-date as of March 3. Its low expense ratio of 0.08% makes it competitive with other dividend-focused funds, despite having only $11 billion in assets under management, the lowest on this list.
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