The US stock market has turned negative on the year, but you wouldn’t know it by looking at results for the low-volatility equity risk factor. Using a set of ETFs to track this space shows that the low-vol risk premium is outperforming the rest of the field by a wide margin in 2025 through Thursday’s close (Mar. 6).
The iShares MSCI Minimum Volatility ETF (NYSE:USMV) is up 4.8% on the year so far. That’s the strongest factor performance by far and it stands in sharp relief compared with the 2.3% year-to-date loss for the stock market overall, based on the SPDR S&P 500 ETF (SPY).
Two other factors are holding on to modest gains this year: high-dividend (VYM) and large-cap value (IVE), which are up 1.5% and 0.9%, respectively, in 2025. Otherwise, red ink prevails this year. The deepest factor loss: high beta (SPHB), which has crashed with an 8.1% year-to-date loss.
It’s debatable if the handful safe havens within the factor space will extend their resilience. The stock market overall is certainly taking a hit from the spike in business uncertainty that’s been triggered by President Trump’s fast-changing decisions on tariffs.
The latest news: Trump paused tariffs for Canadian and Mexican goods covered by the North American trade agreement (USMCA) until April 2, although tariffs will still apply to roughly 50% of Mexican imports and 60%-plus of Canadian goods.
For businesses, “it’s not just the broad fear of tariffs; it’s not knowing if they’ll be affected, how they’ll be affected or when they’ll be affected,” said Gregory Daco, chief economist at the global consulting firm EY Parthenon. “That’s the gist of the conversations we have with clients across multiple sectors: They don’t know how to best position themselves with regard to the latent uncertainty about tariffs moving forward.”
For investors who’ve positioned their portfolios with an allocation to low vol (USMV), however, they’re enjoying a rare port in the storm so far this year.