A safer haven for investors? How low-volatility, high-dividend ETFs offer stability

Jeff Silverman, a senior client portfolio manager at Franklin Templeton, unpacks the strategy behind these Franklin Templeton’s suite of low-volatility, high-dividend ETFs and why they could be the right choice amid today’s challenges.

The case for low-volatility, high-dividend ETFs

“These products were designed to meet this exact moment where investors are looking to de-risk,” Silverman explains. “While you can’t eliminate market risk, you can reduce portfolio risk. Our ETFs focus on quality and income, ensuring a more defensive posture by selecting companies with strong fundamentals, sustainable growth, and reliable dividends. This unique combination allows investors to achieve a steady return and experience a smoother ride.”

Where some strategies only focus on large-cap stocks or past dividend performance, Franklin Templeton’s suite considers earnings stability, profitability, historical price volatility, and various factors that combine to paint a comprehensive risk profile. In addition to diversification across market caps, this suite is competitively priced.

The ETF suite is crafted to provide flexibility in portfolio construction, whether as a core holding or a satellite addition. Silverman outlines a few potential use cases, “These solutions span Canada, the U.S., and international markets, so they’re strong enough to be core holdings on their own. Ideally, they’re combined for a highly diversified equity allocation. But they’re also versatile enough to act as a stabilizer within a portfolio.”

For instance, investors who may have enjoyed gains from recent tech stock rallies could now consider reallocating a portion into a more stable, dividend-driven strategy. Likewise, regional underweight positions can be balanced through Franklin Templeton’s Canadian, U.S., or international offerings, allowing advisors to tailor exposure based on client needs.