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

Source The Motley Fool

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.

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Image source: Getty Images.

This ETF keeps delivering passive income for investors

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.

JEPI Chart

JEPI data by YCharts.

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.

Sleep better with the Vanguard Utilities Index Fund ETF working for you

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.

While the fund includes gas and water utilities, it's electric utilities that make up the lion's share -- about 62% -- of the Vanguard Utilities Index Fund ETF. Illustrating the concentration in electric utilities, NextEra Energy, Southern Company, and Duke Energy, the three largest regulated utilities found on public markets based on market cap, are the fund's top three holdings, representing a combined 25.6% weighting.

To understand why the Vanguard Utilities Index Fund ETF is an alluring option for those looking to fortify their holdings against market volatility, consider that the fund has provided a total return of over 26.6% over the past year, compared to the 5.9% total return of the S&P 500 during the same period. It's not a guarantee of continued outperformance, but it's certainly noteworthy.

A great choice for value and income investors

Daniel Foelber (Vanguard Energy ETF): The energy sector was one of the best-performing sectors through the first quarter of 2025, but has sold off considerably in April. In fact, it is the worst-performing stock market sector in April, down more than technology and consumer discretionary.

^IXR Chart

^IXR data by YCharts.

Tariffs could potentially slow down the economy, leading to lower oil and gas demand and prices. But OPEC+ is increasing production, which could lead to a further supply/demand imbalance. Given these factors, it makes sense that energy stocks have pulled back. But the sell-off could be a great opportunity for long-term investors.

The Vanguard Energy ETF is an excellent choice for folks looking to scoop up shares of high-yield oil and gas companies. The ETF targets a mix of U.S. oil and gas companies across the upstream (exploration and production), midstream (energy infrastructure and transportation), and downstream (refining and marketing) industries.

Integrated majors ExxonMobil (NYSE: XOM) and Chevron (NYSE: CVX) make up a combined 38% of the fund. Other top holdings include exploration and production giants like ConocoPhillips and EOG Resources, midstream mammoths Williams Companies, Oneok, and Kinder Morgan, downstream company Phillips 66, oilfield services firm Schlumberger, liquefied natural gas operator Cheniere Energy, and more.

Many oil and gas companies use dividends to pass along profits to shareholders. Majors ExxonMobil and Chevron have impeccable track records of increasing their dividends even during severe industry downturns. In fact, ExxonMobil has increased its payout for 42 consecutive years, while Chevron has an impressive streak of its own at 38 years.

However, not all oil and gas companies are as consistent as ExxonMobil and Chevron. Therefore, investing in an ETF helps mitigate the risk of dividend cuts.

The Vanguard Energy ETF sports an expense ratio of just 0.09% and has a minimum investment of $1 -- making it a low-cost way to invest in the energy sector without committing a ton of capital. The fund has a price-to-earnings ratio of 13.3 and a yield of 3%, making it a good choice for value investors seeking passive income.

Should you invest $1,000 in JPMorgan Equity Premium Income ETF right now?

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JPMorgan Chase is an advertising partner of Motley Fool Money. Daniel Foelber has no position in any of the stocks mentioned. Lee Samaha has no position in any of the stocks mentioned. Scott Levine has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Cheniere Energy, Chevron, EOG Resources, JPMorgan Chase, Kinder Morgan, and NextEra Energy. The Motley Fool recommends Duke Energy and Oneok. The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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