Despite tariff fears, geopolitical tensions and AI bubble concerns weighing on markets in 2025, the S&P 500 posted solid double-digit growth, gaining about 17% last year. However, volatility remains elevated in the markets.

The start to 2026 has been far from smooth, as elevated geopolitical risks have carried over from last year, keeping uncertainty high. Ongoing tensions in the Middle East and Asia’s major flashpoints have fueled geopolitically driven volatility, prompting investors to play it safe in the near term.

The recent U.S. military operations in Venezuela have added another layer of complexity to an already fragile global geopolitical landscape. The CBOE Volatility Index has jumped about 4.5% since last Friday, indicating a shift toward risk-off sentiment.

According to Reuters, markets showed limited immediate reaction to Saturday’s U.S. military operations in Venezuela, but some investors warn that geopolitical risks may be underestimated, refocusing attention on global tensions and driving renewed interest in safe-haven assets.

Per another Reuters article, a tech-driven inflation surge could quickly dampen the mood, with markets already signaling concern over rising costs and potential AI overinvestment.

Why Should Investors Consider Volatility ETFs?

Increasing exposure to volatility ETFs in the short term can be a winning move for investors. Taking precautions upfront is better than facing avoidable risks later. These funds have delivered short-term gains during periods of market chaos and may climb further if volatility continues.

Investors with a long-term horizon may be able to look past these near-term uncertainties, but in the current economic environment, volatility-focused funds and strategies are ideal for reassessing volatility exposure for investors with a short-term horizon.

Volatility is unlikely to fade entirely in 2026, making a stronger case for maintaining exposure to volatility ETFs, as a strategic hedge against market uncertainty (See: all Volatility ETFs here).

ETFs to Explore

Below, we highlight a few funds that investors can consider to gain increased exposure to volatility ETFs.

iPath Series B S&P 500 VIX Short-Term Futures ETN (VXX Quick QuoteVXX - Free Report)

iPath Series B S&P 500 VIX Short-Term Futures ETN seeks to track the performance of the S&P 500 VIX Short-Term Futures Index Total Return. The index offers exposure to a daily rolling long position in the first and second-month VIX futures contracts.

iPath Series B S&P 500 VIX Short-Term Futures ETN charges an annual fee of 0.89%.

ProShares VIX Short-Term Futures ETF (VIXY Quick QuoteVIXY - Free Report)

ProShares VIX Short-Term Futures ETF seeks to track the performance of the S&P 500 VIX Short-Term Futures Index, which measures the movements of a combination of VIX futures and is designed to track changes in the expectation for one month in the future.

ProShares VIX Short-Term Futures ETF is ideal for investors looking to gain from an increase in expected volatility of the S&P 500. The fund charges an annual fee of 0.85%.

ProShares VIX Mid-Term Futures ETF (VIXM Quick QuoteVIXM - Free Report)

ProShares VIX Mid-Term Futures ETF seeks to track the performance of the S&P 500 VIX Mid-Term Futures Index, which measures the movements of a combination of VIX futures and is designed to track changes in the expectation for VIX five months in the future.

ProShares VIX Mid-Term Futures ETF is ideal for investors looking to gain from an increase in expected volatility of the S&P 500. The fund charges an annual fee of 0.85%.