Looking to Rest Easy Amid Stock Market Turmoil? Consider These 3 No-Brainer ETFs for Passive Income.

Daniel Foelber, Scott Levine, and Lee Samaha, The Motley Fool

Sun, Apr 20, 2025, 3:12 PM 6 min read

Selloffs can test the fortitude of even the most seasoned investors. While volatility is unavoidable when investing in the stock market, there are ways to mitigate it.

Exchange-traded funds (ETFs) grant exposure to dozens or even thousands of different companies under one ticker. ETFs that pay dividends provide investors with diversification and passive income that can make it easier to endure stock market volatility.

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Here's why the JPMorgan Equity Premium Income ETF (NYSEMKT: JEPI), the Vanguard Utilities ETF (NYSEMKT: VPU), and the Vanguard Energy ETF (NYSEMKT: VDE) stand out as three top funds to buy now.

Lee Samaha (JPMorgan Equity Premium Income ETF): Investors buy into this ETF expecting low volatility returns and a consistent monthly income regardless of market conditions. That means foregoing some upside potential in a bull market, but retaining monthly income and downside protection in a bear market.

As previously discussed, this ETF delivered positive total returns and outperformed the S&P 500 (SNPINDEX: ^GSPC) until the end of March. Unfortunately, the market slump in April means it's now down on the year (total return basis), but the outperformance versus the S&P 500 has increased.

For a few reasons, now is a good time to buy the ETF. First, at the time of writing, it trades at a slight discount to its net asset value.

Second, with a trailing dividend yield of almost 7.5%, the ETF offers investors hefty income. Third, the ETF's strategy of gaining positive exposure to a down move in the market using derivative products while holding U.S. equities continues to provide a secure source of monthly passive income. If you are worried about moderately declining or flat markets this year, this ETF is a good place to invest.

Scott Levine (Vanguard Utilities Index Fund ETF): A soothing cup of chamomile tea before bedtime may help some, but an even better remedy for riding out the current market volatility is to reach for a reliable ETF that provides steady passive income -- an ETF like the Vanguard Utilities Index Fund ETF. Because utility stocks generate consistent revenues and cash flows, they're often a priority on investors' buy lists during times of economic uncertainty. With the Vanguard Utilities Index Fund ETF offering a 2.9% 30-day SEC yield and a low 0.09% expense ratio, it's an especially attractive option right now.