How Our Favorite ETFs Are Performing Amid Market Volatility

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Volatility has rocked U.S. stocks, so we decided to check in on the U.S. stock funds in the Kiplinger ETF 20. Most performed in line with expectations, but some investors may find one outcome surprising.

First, a little context. After peaking in February, the S&P 500 Index plunged 19% before recovering some in early April.

By the end of April, the index was down 9% from its peak on February 19. The 11 U.S. stock funds in the Kip ETF 20 – our favorite exchange-traded funds – performed in line with the benchmark with an average loss of 9%.

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A focus on dividends and quality helped. The Schwab U.S. Dividend Equity ETF (SCHD) and the Vanguard Dividend Appreciation ETF (VIG) held up best, declining 7.5% and 6.4%, respectively, through April from the market peak.

The JPMorgan U.S. Quality Factor ETF (JQUA) was not far behind, with a 7.3% loss. It focuses on stocks that pass certain quality and profitability measures.

Funds that emphasize smaller companies and tech stocks fared worse. The iShares Core S&P Mid-Cap ETF (IJH) and the iShares Core S&P Small-Cap ETF (IJR) lost 10.8% and 14.3%, respectively.

Nipping at their heels were the Technology Select Sector SPDR ETF (XLK), which holds 65 information technology stocks, with a 13.0% loss, and the SPDR S&P Kensho New Economies Composite ETF (KOMP), which declined 13.6%. Tech stocks make up 35% of that portfolio, which focuses on innovative companies.

But one fund turned its fortunes around. After lagging the S&P 500 for much of the past decade, the Invesco S&P 500 Equal Weight ETF (RSP) weathered the swoon far better than any other U.S. stock fund in the Kip ETF 20, with a 7.0% loss.

The fund holds shares in every member of the S&P 500 in equal proportions, rather than weighting them by market value. That approach helped to lessen the impact of losses in some of the biggest S&P 500 firms, including Tesla (TSLA), Nvidia (NVDA) and Apple (AAPL).

Meanwhile, the equal-weighting enhanced the impact of gains in smaller companies in the index, including software company Palantir Technologies (PLTR), CVS Health (CVS) and goldmining company Newmont (NEM).

This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

Nellie joined Kiplinger in August 2011 after a seven-year stint in Hong Kong. There, she worked for the Wall Street Journal Asia, where as lifestyle editor, she launched and edited Scene Asia, an online guide to food, wine, entertainment and the arts in Asia. Prior to that, she was an editor at Weekend Journal, the Friday lifestyle section of the Wall Street Journal Asia. Kiplinger isn't Nellie's first foray into personal finance: She has also worked at SmartMoney (rising from fact-checker to senior writer), and she was a senior editor at Money.