Emerging market equities have been underperforming developed economies this year, but low-volatility ETFs have been holding up better in this notoriously risky asset class.

The iShares MSCI Emerging Markets ETF (NYSEArca: EEM) is down 5.1% year-to-date, whereas the S&P 500 index has gained 10.6%. Meanwhile, the iShares MSCI Emerging Markets Minimum Volatility ETF (NYSEArca: EEMV) has stayed relatively flat, dipping 0.3% year-to-date. Over the past year, EEMV has gained 10.6%, compared to the 1.8% rise in EEM.

“This ETF’s portfolio provides a desirable combination of lower volatility and, given its sector tilts versus the cap-weighted benchmark, more direct exposure to domestic growth, which is one of the more appealing reasons for investing in emerging markets,” writes Morningstar Patricia Oey in an overview for EEMV.

In a white paper, Emerging Global Advisors attributed the wider price swings in the MSCI Emerging Market Index, the underlying index of EEM, to large concentrations in volatile sectors like financials, energy and materials, and more volatile countries like Russia and Brazil, reports Ben Levisohn for Barron’s.

Low-volatility strategies have shown a history of outperforming traditional benchmark indices, both in the U.S. and overseas, generating better risk-adjusted returns relative to their corresponding cap-weighted indices over the long run.

“Over the 10 years ending Dec. 31, 2012, this ETF’s benchmark index outperformed its parent index by an average of 350 basis points per year while exhibiting much lower volatility (the MSCI Emerging Markets Minimum Volatility Index had and annual standard deviation of 19.3% versus 24.1% for the parent index over this period),” Oey added.

The emerging markets are expected to post an overall growth of 5.9% for 2013, compared to the 2% in developed economies. However, because of a more conservative tilt, low-volatility strategies could underperform during short-term bull market rallies. [Emerging Market ETFs Ready for A Turnaround?]