7 Smart ETFs for Low-Risk Investors

By U.S. News & World Report
May 26, 2026 | 8:00 PM

One of the major consequences of the unique 2022 bear market was a proliferation in alternative exchange-traded funds, or ETFs, afterwards, which The Wall Street Journal termed “boomer candy.”

That year challenged many of the assumptions underlying the traditional 60/40 balanced portfolio of stocks and bonds. Amid historically high inflation and one of the most aggressive Federal Reserve tightening cycles in decades, both stocks and bonds declined simultaneously.

The issue largely came down to stock-bond correlation, or the degree to which the two asset classes move together. Historically, during the long period of declining interest rates across developed economies, bonds tended to provide a reliable counterweight to stocks during market downturns.

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When equities sold off, bond prices often rose as interest rates fell, helping stabilize portfolios and giving investors the ability to rebalance between the two asset classes. In 2022, however, that relationship broke down as inflation and rising yields pressured both stocks and fixed income at the same time.

Some institutional investors and advisors now question whether the old negative stock-bond correlation regime will fully return. As a result, some allocators have begun advocating for portfolio structures closer to a 40-30-30 model, referring to 40% stocks, 30% fixed income and 30% alternatives. This model has garnered attention in the wake of significant market volatility throughout 2026.

“The outbreak of war involving Iran has threatened critical energy transit routes like the Strait of Hormuz, causing sharp fluctuations in energy prices and keeping inflation risks elevated despite strategic oil reserve interventions,” explains Jeff Schwarte, chief equity strategist at Simplify Asset Management. “This persistent inflationary pressure has forced the Federal Reserve to maintain a strict higher-for-longer interest rate stance, challenging earlier expectations for a steady easing cycle.”

Many of these alternative ETFs rely on options strategies designed to limit the range of potential outcomes for investors. In exchange for capped upside participation and, in some cases, no dividend participation, investors may receive more explicit downside protection rather than relying solely on correlations holding between stocks and bonds.

“Correlations tend to break when you need them most,” says Matt Kaufman, senior vice president and global head of ETFs at Calamos Investments. “With options, you have contractual certainty, and that is what a lot of investors today are after.”

That does not mean the traditional stock-and-bond balanced portfolio is obsolete. There is still a strong case for simplicity, especially since many broad-market stock and bond ETFs remain highly diversified, fairly tax efficient and very affordable.

However, investors willing to look beyond traditional asset allocation may find that some alternative ETFs can potentially provide a smoother experience and better risk-adjusted returns.

Here are seven of the best smart ETFs for low-risk investors:

ETF	Expense Ratio
Invesco S&P 500 Low Volatility ETF (ticker: SPLV)	0.25%
Invesco S&P 500 High Dividend Low Volatility ETF (SPHD)	0.30%
iShares MSCI USA Min Vol Factor ETF (USMV)	0.15%
FT Vest Laddered Buffer ETF (BUFR)	0.95%
Calamos Laddered S&P 500 Structured Alt Protection ETF (CPSL)	0.79%
Simplify US Equity PLUS Downside Convexity ETF (SPD)	0.53%
Simplify Hedged Equity ETF (HEQT)	0.43%

Invesco S&P 500 Low Volatility ETF (SPLV)

“SPLV holds the 100 stocks in the S&P 500 with lowest one-year trailing standard deviation of returns,” explains Nick Kalivas, head of factor and core equity ETF product strategy at Invesco. “Stocks are weighted by inverse volatility so that the stocks with the lowest volatility get the highest weight, and the process is repeated four times a year.” SPLV does not employ derivatives or shorting for protection.

Compared to the vanilla S&P 500, SPLV’s portfolio is overweight defensive, less-cyclical sectors like utilities and consumer staples. In 2022, the ETF was only down 4.9% on a total return basis by year end, while the State Street SPDR S&P 500 ETF Trust (SPY) fell 18.2%. SPLV charges a 0.25% expense ratio. The ETF currently has a 2.3% 30-day SEC yield and pays distributions monthly rather than quarterly.

Invesco S&P 500 High Dividend Low Volatility ETF (SPHD)

“SPHD holds 50 stocks in the S&P 500 with the highest yield and lowest one-year trailing standard deviation,” Kalivas says. “The stocks in SPHD are weighted by their 12-month trailing dividend yield with a 3% cap per stock and 25% sector limitation.” This ETF delivers a high 4.6% 30-day SEC yield with monthly distributions, but is slightly more expensive than SPLV with a 0.3% expense ratio.

“The low volatility screen is used with the expectation of reducing the risk of holding stocks vulnerable to a cut in their dividend,” Kalivas notes. Many dividend ETFs attempt to avoid so-called yield traps simply by excluding the highest-yielding decile or quartile of stocks. SPHD instead explicitly incorporates historical volatility into its methodology, while not picking dividend stocks on headline yield alone.

iShares MSCI USA Min Vol Factor ETF (USMV)

One criticism of low-volatility ETFs like SPLV is that their methodology can create sector concentration. While those concentrations often land in more defensive areas such as utilities, consumer staples and health care, the trade-off is that the portfolio can significantly underweight higher-growth sectors like technology and consumer discretionary. Over time, that can increase the risk of lagging the market.

Minimum-volatility ETFs differ from simpler low-volatility strategies. Rather than merely selecting stocks with the lowest historical volatility, USMV uses a quantitative optimization process to build a portfolio that attempts to minimize volatility at the aggregate portfolio level, while still maintaining overall sector exposures closer to the broader U.S. market. USMV charges a 0.15% expense ratio.

FT Vest Laddered Buffer ETF (BUFR)

“Buffer ETFs help narrow the range of possible return outcomes for the index that they track,” says Mark Andraos, partner and wealth advisor at Regency Wealth Management. “Think of them as ‘gutter guards’ when you went bowling as a child; the rails help keep you in a specified range.” For example, BUFR is a fund-of-funds that holds 12 monthly buffer ETFs protecting against the first 10% of losses before fees.

“The cost of paying for the downside protection is capped upside potential,” Andraos says. “If you think the market is poised for a breakout and will rally significantly from its current levels, buffer ETFs may not be suitable, as your upside will be capped to cover the cost of the downside protection.” Moreover, many buffer ETFs only provide price appreciation and pay no dividends, which can reduce total return.

Calamos Laddered S&P 500 Structured Alt Protection ETF (CPSL)

“CPSL is a laddered portfolio of all the monthly vintages of our S&P 500 Structured Protection ETFs,” Kaufman explains. “Each vintage has a one-year outcome designed to deliver upside to the S&P 500 to a cap, with 100% protection over the outcome period.” This ETF provides greater downside protection than BUFR does, but caps upside price appreciation potential more aggressively as a trade-off.

Most buffer ETFs provide point-to-point protection over a specific outcome period, often tied to a particular month. That requires investors to actively time entry points to maintain consistent protection characteristics. “When laddered in a single ETF like CPSL, you obtain better diversification of outcome periods, reduce timing and maturity risk, and smooth upside capture over time,” Kaufman explains.

Simplify US Equity PLUS Downside Convexity ETF (SPD)

“Tech companies have aggressively ramped up their capital expenditure to build data centers, flooding credit markets with corporate debt and sparking periodic sell-offs whenever investors grow impatient over the timeline for profitability,” Schwarte says. “These factors have created a high-dispersion environment where corporate earnings are forced to compete with macroeconomic uncertainty.”

Investors worried about a repeat of the dot-com bubble may find SPD appealing as an alternative core holding. The ETF combines long exposure to the S&P 500 with a protective options overlay designed to provide convexity, meaning downside protection can accelerate as market losses deepen rather than moving in a simple one-to-one relationship. SPD charges a 0.53% expense ratio.

Simplify Hedged Equity ETF (HEQT)

HEQT’s core is the S&P 500, but the ETF augments this with a “put spread collar,” consisting of a 5% out-of-the-money (OTM) long put, a 20% OTM short put and a covered call. This strategy minimizes the variability of outcomes for investors. “Since its inception on Nov. 2, 2021, HEQT has significantly reduced risk, with realized volatility of 8.6% compared to 17.6% for the S&P 500,” Schwarte explains.

Unlike most buffer ETFs, HEQT’s protection is evergreen. “By implementing a laddered collar strategy with options expiring over three sequential months, HEQT aims to enhance stability and reduce the impact of rebalancing luck, ensuring a more consistent hedged equity experience,” Schwarte explains. “HEQT’s maximum drawdown of 11.5% is less than half that of the S&P 500’s 24.5%.”

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7 Smart ETFs for Low-Risk Investors originally appeared on usnews.com

Update 05/27/26: This story was previously published at an earlier date and has been updated with new information.

Asia’s next great gourmet destination? Inside Indonesia’s fine-dining revolution

By CNN
August 11, 2026 | 5:44 AM

More than 120 years ago, Eliza Ruhamah Scidmore, National Geographic magazine’s first female writer, photographer and board member, chronicled her travels through colonial Indonesia in her book “Java: The Garden of the East.”She was particularly fascinated by a feast known as the rijsttafel (rice table), a multi-dish banquet that was served in the grand Hotel de Nederlanden in Batavia, as Jakarta was known then.Scidmore vividly recalled a “conglomerate mountain” of food, including bits of fish, duck, chicken, beef, omelettes and onions piled alongside steaks, salads, curries, chutneys, spices and tropical fruits.The sumptuous spread had something to satisfy everyone amongst the 100 or so guests that filled the grand dining hall — even the “squeamish folk, unseasoned tourists and well-starched Britons with a small sense of humor.”Like Scidmore, most early Western documentation of Indonesia’s flavors focused on the opulent colonial feast. Little else was known about the diverse and rich flavors found across the enormous archipelago, in spite of it being home to the fabled Spice Islands, which sparked a 16th- and 17th-century “spice rush” for cloves, nutmeg and mace by Portuguese, Dutch and British traders.In more recent decades, the world has become better acquainted with some of the beloved humble foods found in Indonesian homes and warungs (street-side eateries), with satay, nasi goreng and beef rendang among the most familiar dishes beloved by travelers.But now, there’s a rising number of contemporary chefs who are elevating the national cuisine on the global stage by reimagining its famous spices into fine-dining experiences, while sharing the sophisticated stories of Indonesian flavor through a different lens.Made up of thousands of islands dotted across two oceans, Indonesia is the world’s largest archipelagic country. It would be an understatement to say the country’s cuisine is wildly varied.As a result, “the existing understanding of Indonesian food culture is very shallow,” says William Wongso, an Indonesian culinary expert and author.Boasting an enviable array of regional ingredients and flavors, the country’s chefs have been working to educate international gourmets — and even locals — about the beauty of Indonesian cuisine.And Jakarta, its capital city, has become a breeding ground for the movement. Wongso compares it to the dining scenes in New York or Shanghai, which draw talent from all over their respective countries. “Everybody wants to come here to make a thing,” he says. “So people from different regions bring flavors and food cultures.”Some open humble warungs and serve their home cooking. A few look beyond recipes and focus on elements that make Indonesian cuisine unique for a wider audience, reinventing the whole experience.A modern, fine-dining blueprintEnter August, which opened in 2021 inside a gleaming skyscraper in Jakarta’s central business district.The duo behind the concept, Jakartan Hans Christian and Budi Cahyadi from the Indonesian island of Lombok, were definitely not the first people to promote Indonesian flavors — Christian emphasizes figures like Wongso, for example, who have been championing gastro-diplomacy abroad for decades.But August has spearheaded a new format and standard for the country’s fine-dining restaurants: a modern, Indonesia-inspired tasting menu operating at a world-class level of culinary execution and service.The industry has already noticed. August became one of the few Indonesian restaurants to achieve international recognition, placing 42nd on Asia’s 50 Best Restaurants 2026 and earning accolades at The Best Chef Awards.“When I came back to Jakarta, you either had classic French fine dining or very casual bistros, mostly run by expat chefs,” says Christian, who sharpened his skills in Malaysia and the United States before returning to Jakarta in 2016.“There were no locally grown chefs doing their own thing with their own roots or interpretations. For me, August is about the pride of telling our own story … and a responsibility to not only embrace our roots, but also relearn them.”Cahyadi, with more than a decade of hospitality experience in a luxury hotel, agrees. He currently helms the front of house in August’s dining room.“In Jakarta, you either had to pick a place where the food was good but the service was lousy, or a casual place where service was bad but food was decent. When I met Hans, I knew it was time for a place where food is excellent and hospitality is delivered at the exact same time,” he says.In 2019, the two started August as a private kitchen concept before turning it into the current restaurant in 2021.Inside August’s intimate dining room — warmly lit with dark wood accents and a bright, open stainless-steel kitchen at the end of the dining room — the restaurant’s two tasting menus blend familiar Indonesian flavor profiles into completely unexpected forms.Their daikon dish is inspired by the format of Japanese agedashi tofu — silken tofu coated in starch, deep-fried until golden brown and traditionally dressed in dashi sauce.August’s version is served with a cuko sauce — a sweet and sour reduction made with tamarind and palm sugar featuring a tangy umami taste.It reminds locals of eating pempek, the Indonesian fishcake. A drizzle of andaliman pepper oil, Indonesia’s version of Sichuan peppercorns, gives the dish a unique, numbing spicy kick.Another highlight features Japanese Kimendai fish cooked by pouring hot oil over the scales until it crisps up while keeping the flesh tender. It sits in a kuah garang asem (yellow sour curry sauce) from the Central Java region.The sourness comes from a native green fruit called belimbing wuluh (or bilimbi), which looks like an oblong tomato but tastes extremely acidic, while ginger flowers provide a touch of freshness.The curry base is made from a yellow bumbu — made of aromatics such as turmeric and lemongrass. Often compared with France’s mother sauces (a group of five master sauces, such as Béchamel and Hollandaise, that are said to be the foundation of classical French cooking), Indonesian bumbu are spiced sauces that take hours to caramelize and form the base of many different dishes.Christian says that August has slowly evolved over the years, with more Indonesian flavors being incorporated into his menu as the team gains confidence and the demand grows.“In the beginning, our menu leaned more towards classic European because that was my formal training. When more international guests came, they expected more Indonesian flavor,” says Christian.Now, with half of their guests coming from overseas, the team tries to find the balance carefully without being intimidating.“Finding that balance was crucial — doing modern Indonesian cooking in a way that’s exciting for locals without just putting expensive ingredients in a traditional dish. We want to start from a product or a cooking method and create something new out of that idea,” says Christian.The founders admit that Jakarta has few fine dining concepts compared to fellow Southeast Asian cities such as Kuala Lumpur, Singapore, Manila and Bangkok.“We knew we were a few years behind, but we are in progress to catch up. Over the years, the interest from people who want to learn and taste the flavor of Indonesia is growing,” says Christian. “For the past five to six years, we’ve been on a mission to prove people wrong.”It wasn’t easy. It wasn’t just about the menus, but the operation.They were the first restaurant to impose a reservation fee for diners in Jakarta. It also took a few years to educate their diners to be punctual for the tasting menu so the table could start the menu together – an often tricky feat in Jakarta traffic.But August’s success helped set new operational benchmarks for the city, proving that local diners were ready to enjoy high-end tasting menus.In the years since, Jakarta’s fine-dining community has expanded rapidly.ESA, opened in 2023, proudly offers a menu called New Jakarta Cuisine. Kindling, which opened the following year, blends Indonesian-Chinese dishes with French technique. Selera, newly opened this year in the Keraton at the Plaza hotel, emphasizes the nation’s culinary heritage with local ingredients.Outside the capital, things are changing, too, particularly in the country’s tourist hotspots. Bali, for example, has evolved to offer more than just fine resort dining and Western restaurants catering to visitors.Locavore NXT, helmed by Dutch-Indonesian duo Eelke Plasmeijer and Ray Adriansyah, serves a tasting menu that highlights local ingredients. The independent concept also has a farm, laboratory and store.Meanwhile, young, local and independent concepts are slowly increasing elsewhere in the country.Overlooking the historical Prambanan Temple and Mount Merapi, Suwatu in Yogyakarta, the royal cultural heart of Java, is an upscale hillside restaurant with a menu packed with local dishes cooked by local villagers.In Bandung, both MMBS (Mari Merangkai Bunga Seroja) and Plataran Bandung serve local Sundanese cuisine, with hyper-seasonal tasting menus featuring a creative twist.Not just about the price tagAt the same time, classic Indonesian restaurants are reexamining the stories they would like to tell.For a long time, the 1945 Restaurant inside the Fairmont Jakarta has been regarded as the city’s only high-end Indonesian restaurant in a five-star hotel.Taking over as the chef de cuisine this year, Yopi Tumeru has been determined to inject fresh ideas into the 11-year-old establishment — and he was inspired by the traditional rijsttafel concept.His vision of the legendary feast isn’t only a sumptuous buffet but an educational exploration of Indonesian cuisine.“For many years, Indonesian food was presented either as home cooking, street food or part of a hotel buffet… Our Rijsttafel was designed as a culinary journey through the archipelago. We preserve the generous and communal character of the traditional experience while refining the portions, presentation and sequence,” Tumeru says.The menu includes dishes such as wagyu beef rendang, duck leg confit with sambal madura, tuna collar rica-rica (rahang tuna), tempe nachos and es teler cheesecake — all created to shine new light onto old dishes.For chefs like Tumeru, presenting Indonesian cuisine in a haute gastronomic format isn’t just about slapping on higher price tags and using expensive ingredients.They are proudly showcasing the often undervalued Indonesian cuisine — from the ingredients, the knowledge and the labor to the cultural heritage.“Rendang, for example, is not simply beef cooked in coconut milk. It requires patience, careful control of the heat, and an understanding of how the spices develop over time,” says Tumeru, who feels chefs have a responsibility to help guests appreciate that complexity.Despite giving Indonesian cuisine an upscale makeover, all of the chefs insist their roots and hearts remain with the humble, family-run warung. They encourage diners to ask for street-food tips, which might otherwise feel intimidating without a local guide.The movement isn’t about replacing affordable neighborhood joints. It’s about broadening how the world sees Indonesian food, using fine dining as a welcoming gateway into their country’s vast culinary heritage.“There is still a mindset that Indonesian food cannot be expensive — that is not true,” says Wongso.“These high-end restaurants, if they’re doing it right, they’re quite helpful in changing people’s mindsets. Indonesian food cannot be cheap. It takes immense labor and skill. A single sauce or spice paste takes hours of balancing and preparation. You can Google many things, but you can’t Google taste.”The-CNN-Wire™ & © 2026 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.

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