The popularity of dividend and low-volatility ETFs shows many investors want a conservative strategy if they’re going to dip a toe in the stock market.

For example, Vanguard Dividend Appreciation ETF (NYSEArca: VIG) is one of the best-selling funds in 2012, raking in $1.9 billion of inflows year to date through July, according to ETF Industry Association data. [An ETF That Tracks Quality Dividend Stocks]

The iShares Dow Jones US Select Dividend (NYSEArca: DVY) has attracted $837 million and SPDR S&P Dividend (NYSEArca: SDY) has brought in $466 million.

“While the belief in the U.S. stock market has taken a hit, ETFs continue to grow. Some of the most successful launches over the past year are in low-volatility products, which buy stocks that exhibit below-average levels of price movement,” said Nicholas Colas, ConvergEx Group chief market strategist, in a note Tuesday.

PowerShares S&P 500 Low Volatility ETF (NYSEArca: SPLV) is the largest fund in this category. [Using Low-Volatility ETFs to Endure Market Swings]

“Dividend-oriented investing has also been popular,” he wrote. “Old Paradigm: ‘Widows and orphan stocks’ like utilities. New Paradigm: ‘Widows and orphans ETFs’ like emerging market dividend products and a good Min-vol fund.”

It’s not surprising that equity investors are taking a conservative approach after enduring the dot-com and subprime crashes the past decade. Dividend ETFs have also attracted investors looking to boost income in a low-interest-rate market.

Other low-volatility ETFs include:

  • iShares MSCI All Country World Minimum Volatility Index Fund (NYSEArca: ACWV)
  • iShares MSCI Emerging Markets Minimum Volatility Index Fund (NYSEArca: EEMV)
  • iShares MSCI EAFE Minimum Volatility Index Fund (NYSEArca: EFAV)
  • iShares MSCI USA Minimum Volatility Index Fund (NYSEArca: USMV)
  • PowerShares S&P Emerging Markets Low Volatility Portfolio (NYSEArca: EELV)
  • PowerShares S&P International Developed Low Volatility (NYSEArca: IDLV)

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