Low-volatility exchange traded funds that have taken a more cautious approach have outperformed the broader equities market as short-term concerns unbalanced stocks’ march upward.

Over the past year, the PowerShares S&P 500 Low Volatility Portfolio (NYSEArca: SPLV) gained 19.2% and iShares MSCI USA Minimum Volatility ETF (NYSEArca: USMV) rose 18.2%. Year-to-date, SPLV was up 0.1% and USMV was 0.5% higher. In contrast, the S&P 500 index increased 13.5% over the past year and fell 1.7% year-to-date.

Market volatility is spiking as as concerns mount over the potential effects of a plunge in crude oil prices. The CBOE Volatility Index, or VIX, closed at 21.6 Wednesday, compared to its historical range between 15 and 20. The VIX, a guage of demand for protection against losses in U.S. equities, has oscillated more than 10% in three trading sessions since December 31.

“Every time oil goes down into a new range, those fears reignite,” Paul Zemsky, head of multi-asset strategies at Voya Investment Management LLC, said in a Bloomberg article.. “Will something happen in Russia? Will a hedge fund blow up? Which banks will get hammered by this?”

However, a rise in volatility has helped the least volatile stocks standout. Moreover, low-volatility equities are experiencing greater demand due to low interest rates. Traditionally, investors would turn to fixed-income assets to diminish risk exposure. However, with rates more likely to rise and the U.S. economy expected to continue expanding, investors have turned to low-volatile stock options to capture a growing equities market and to hedge some of the market risks. [Low-Volatility ETF Strategies Shine For Now]

For instance, both SPLV and USMV overweight outperforming defensive sector stocks. Specifically, SPLV includes a 20.2% tilt toward health care and 16.0% in consumer staples. USMV has 18.4% utilities and 15.6% consumer staples. Both ETFs also underweight the energy sector, the worst performing area of the market.

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