Low-volatility ETFs have been extremely popular with risk-averse investors but their flashier siblings known as “high-beta” funds have been beating the market in 2013.

PowerShares S&P 500 High Beta (NYSEArca: SPHB) is up 20.5% the past three months. Meanwhile, PowerShares S&P 500 Low Volatility (NYSEArca: SPLV) has gained 9.1% over the same period, while SPDR S&P 500 (NYSEArca: SPY) has delivered a total return of 10.9%, according to Morningstar data. [Low-Volatility ETFs are ‘The New Black’]

Low-volatility and high-beta ETFs take polar opposite approaches.

SPHB, the high-beta fund, tracks the 100 stocks from the S&P 500 with the highest sensitivity to market movements, or beta, over the past 12 months. Beta is a measure of how closely correlated a stock’s returns are to that of the market. The market has a beta of 1.0, and stocks with a beta of more than 1.0 are more volatile than the market.

Conversely, SPLV consists of the 100 stocks from the S&P 500 with the lowest realized volatility over the past 12 months

The high-beta fund’s recent outperformance is due to several factors.

First, Morningstar classifies SPHB as a mid-cap ETF, and this segment has performed well recently.

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