Investors are suffering from interest-rate anxiety. The Federal Reserve just raised short-term rates and could raise them again this year. Long-term bond yields are heading higher too. But fear not. There are funds to help you sleep well at night.

So-called low-volatility exchange-traded funds, often referred to as low-vol or min-vol funds for short, are designed to hold up well during tumultuous times for the broader market. These ETFs invest in stocks that are perceived as less risky and often pay big dividends. Think energy, financials, consumer staples and healthcare companies to name a few.

Tom Essaye, editor of the Sevens Report, noted in a recent newsletter that low-vol funds are "one sensible solution for dampening volatility, but still staying invested in stocks."

Essaye said two obvious choices are the iShares Edge MSCI USA Min Vol Factor ETF and Invesco S&P 500 Low Volatility ETF, which are passively run and each track low-volatility indexes.

The iShares fund has had a better record as of late. It's up nearly 3.5% over the past three months, outperforming the broader market as worries about inflation and higher rates are on the rise. Verizon, Amphenol, ExxonMobil and Welltower are top holdings in the fund, with roughly equal weightings of about 1.5% for each of them.

Invesco's fund, which invests in the 100 stocks in the S&P 500 with the lowest volatility, hasn't done so well though. It's down 1.3% over the past three months compared with a 1.3% gain for the S&P 500. But the fund yields 2.2%, which isn't too shabby even as the 10-Year Treasury flirts with 5%. Berkshire Hathaway, perhaps the poster child for minimum volatility, is the fund's top holding.

Essaye said both the Invesco and iShares funds are good choices for investors "worried about the market's tendency to be more volatile at this time of year, but still want long exposure," adding that "they can especially come in handy if you have new or idle cash to put to work."

For investors looking overseas-and for even bigger dividends-the Franklin International Low Volatility High Dividend Index ETF, is an intriguing option. The fund has a yield of 3.2%.

Sanghamitra Saha, an analyst at Zacks Research, recommended the fund in a recent report, saying that a "focus on low-volatility ETFs could prove intriguing as a Fed interest-rate hike and commentary may cause moderate turbulence in the market." She added that the combination of low volatility and high dividends makes the fund particularly attractive.

The Franklin fund is heavy on natural resources stocks, with Shell, BHP Group, Suncor Energy and Rio Tinto `as top holdings. But the ETF also owns Unilever and Novartis as well as Canadian financial firms Bank of Nova Scotia and Canadian Imperial Bank of Commerce. The strategy has worked well lately. The fund is up 4% since mid-June and nearly 16% for all of 2026.

You will notice that these funds are all light on tech stocks, which may be a good thing at a time where concerns about a potential slowdown in spending on artificial-intelligence is roiling the sector. But there can be a place for more stable tech companies in a low-vol or min-vol fund.

The actively managed Vanguard U.S. Minimum Volatility ETF sprinkles in Apple, Microsoft, Texas Instruments and Analog Devices as top holdings alongside more traditionally low-vol stocks like Chevron, Johnson & Johnson, Berkshire Hathaway and Coca-Cola.

The fund is up 10.6% this year, roughly in line with the S&P 500, and it has outperformed the broader market in the past three months, gaining 2.5%. So low-volatility doesn't have to mean boring and safe. The strategy can generate solid returns as well.