December of 2018 has been an exhausting month for stock market investors. Most investors had been used to seeing the famed “Santa Claus rally” at the end of each year, but this bloody trading action felt more like 2008 than any of the more recent years as the market rose. To make matters worse, headlines were all over the place heading into the last week of 2018 that this was the worst stock market performance for the month of December dating all the way back to the early 1930s under the Great Depression.

While most stock market investors lose money during big stock market sell-offs, they do not have to suffer just because of a big drop in the Dow Jones industrials and S&P 500 indexes or the Nasdaq. In fact, even the smallest of investors can actually profit during these big sell-offs or corrections, and even during market crashes.

24/7 Wall St. has compiled a list of 10 exchange-traded funds (ETFs) and exchange-traded notes (ETNs) for investors who want to keep their money invested during periods of uncertainty. These ETFs and ETNs generally are considered to be among the go-to investment and trading vehicles if it looks like the stock market could drop sharply at any moment. These cover multiple investing strategies outside of regular equity index investing. In an effort to keep this fair and representative, we have included instances in which some of these ETFs have not performed properly during certain times, and we also have identified some risks and caveats that investors need to consider about each fund.

As 2019 kicks off and the pain and volatility of 2018 fades, there were and still are many worries for the economy in 2019. There is of course that looming trade war and tariff battle with China. Fears remain that the Federal Reserve will continue to raise interest rates to the point that the economy will be choked into a major slowdown, and there are fears of what will happen under an inverted yield curve. Growth numbers are slowing in many of the early-cycle economic readings and forecasts, and many corporations already have dialed down their 2019 expectations. There are also those pesky geopolitical risks and a battered international equity market scene that come into play. And many investors are worried about 2019 not being as good as the political gridlock of past years.

The bull market was fun for the last nine-and-a-half years, but waves of volatility and pain in the stock market in 2018 led even some of the more famous and notorious institutional investors and forecasters to start predicting that the bull market was dead or dying. Again, investors do not have to watch the value of their stocks plummet if they look into some simple ETFs designed to help investors hedge their portfolios or even to profit when the next major selling wave hits home.

Investors have been reminded recently that automated trading systems and algorithmic trading can hijack a market with exacerbated moves up and down on any given day. These 10 ETFs can help even the smallest of retail investors avoid losing their shirts, or even make a profit, during uncertainty in the next major sell-off or stock market crash. Investors should look at the performance of these specific ETF and ETN products ahead of, during and after a serious market sell-off. It is surprising just much better they can do as a whole compared to any of the indexes and funds tracking the Dow, S&P 500 and the Nasdaq.

Investors also should consider that there are other funds from ETF issuers that compete against these, often down to the exact same strategy. Leveraged ETFs and others that have strategies too difficult to easily grasp have been left out of this review, as have some of the ETFs that may fit the bill in their models but have low average daily trading volumes.

Here are 10 ETFs for investors who want to avoid, or even profit from, the next big stock market sell-off or even a stock market crash.

1. Short-Term Treasury ETF

There’s supposed to be a tug-of-war of some sort between stocks and bonds during periods of volatility and uncertainty. When investors get spooked out of stocks, they often decide to park in short-term and intermediate-term bonds. There are many funds that track short-term Treasuries. The Schwab Short-Term U.S. Treasury ETF (NYSE: SCHO) is probably about as safe as you get because it only invests in short-duration government debt.

You’re never going to get rich investing in short-term and money-market funds, and watching the trading prices here might sometimes feel like watching paint dry, but you won’t have to worry about looking away from the ticker tape a couple of days and seeing your investment down 10%, 15% or even worse in instruments like this. There are multiple other short-term and money market instruments out there to choose from.

2. Adjustable Treasury ETF

Another investment in Treasury debt is in the Treasury Inflation-Protected Securities (TIPS). The go-to ETF for this strategy is the SPDR Bloomberg Barclays TIPS ETF (NYSE: IPE), which invests in Treasury debt that has an adjustable yield rather than investing in fixed coupon debt. As Treasury yields and inflation rise, the yield on the TIPS is supposed to adjust higher at the same time or with a short delay.

Just keep in mind that if short-term interest rates start to go back down, the yield is supposed to come back down here too. You aren’t going to get rich going for adjustable-yields with the government guarantee, but you also won’t ever go broke. One consideration is that some TIPS were constructed at one point in the no-rate and low-rate cycle in a manner that they could actually get negative yields temporarily.

3. Short-Intermediate Corporate Debt

If you want a little extra yield than short-term government debt, there is corporate debt issued by the top companies in America. They almost always have a higher yield than their government counterparts, and almost all the companies are investment grade in the Vanguard Short-Term Corporate Bond ETF (NYSE: VCSH). This ETF goes out a little further on the curve for added yields as it tracks the Bloomberg Barclays U.S. 1-5 Year Corporate Bond Index. The ETF includes dollar-denominated, investment-grade, fixed and taxable debt issued by industrial, utility and financial companies. Just keep in mind that this ETF was created after the Great Recession.

4. The Preferred Stock ETF

The iShares Preferred Stock ETF (NYSE: PFF) invests in preferred shares rather than common shares. This is a tad more complicated for those new to investing, but they generally come with better safety and higher yields than buying regular stock. During the market crash of 2008 and 2009, many investors wanted to look at preferred securities of major banks and major companies. If things got too bad in the economy, preferred shares, similar to bondholders, are actually senior to the common stockholders. That means if a company folds, the preferred shareholders may still get money back even if the common stockholders get wiped out entirely. Unfortunately, even this ETF performed poorly during the Great Recession due to a high reliance on financial and other companies that were hurt badly during the stock market sell-off.

5. Gold as the Ultimate Uncertainty Hedge

You’ve undoubtedly seen many gold coin and gold gimmick commercials on TV over the years. Well, gold is often considered the ultimate safe-haven trade by many U.S. and international investors alike. The SPDR Gold Trust (NYSE: GLD) is the granddaddy of all gold ETFs as the largest physically backed gold ETF. Gold has not been as dominant during the great bull market in stocks and as interest rates have risen, but when investors want the ultimate safety they frequently go for gold. During the Great Recession, the gold ETF and gold each did slide lower in 2008, but it bottomed late in 2008 about four months ahead of the V-bottom in stocks, and it was off to the races long before stocks with a much stronger gain than equity ETFs through all of 2009 and 2010.

6. Defensive Stocks

Invesco Defensive Equity ETF (NYSE: DEF) aims to track the Guggenheim Defensive Equity Index, which is designed to provide exposure to equity securities of large-cap U.S. corporation. The index selects companies that are deemed to have superior risk-return profiles during periods of stock market weakness and that still offer potential upside during periods of market strength. This ETF might not be immune to an outright stock market crash, but during most sell-offs investors who want to (or need to) keep exposure to stocks almost always flock toward large-cap and defensive companies with quality balance sheets and stable dividends.

7. High Yield — Low Volatility

Almost all investors like high dividends, but in periods of uncertainty they also like to have positions that are not as volatile as the broader market. That is where the SPHD Invesco S&P 500 High Dividend Low Volatility ETF (NYSE: SPHD) comes into play. This ETF tracks the S&P 500 Low Volatility High Dividend Index and is made up of 50 of the S&P 500 stocks that are deemed to have high dividend yields and low volatility. One risk here is that sometimes companies inside change, and the ETF and the index are rebalanced and reconstituted only twice per year (January and July).

8. Short Selling the Stock Market

If you want to own a less sophisticated short selling ETF, the ProShares Short S&P 500 (NYSE: SH) is designed to have the inverse daily performance of the S&P 500 Index so you don’t have to worry about stock picking versus the broader index. If you want to be short the stock market while still owning an ETF, this is perhaps one of the easiest ways. And unlike direct short selling of securities being banned in your IRA or qualified retirement plan, most short-selling equity index ETFs are actually allowed, with certain exceptions.

9. Select Short Selling Like a Hedge Fund

Yes, you pretend to be a sophisticated short seller just like a hedge fund to profit from a falling stock market without ever making another decision. The AdvisorShares Ranger Equity Bear ETF (NYSE: HDGE) uses a bottom-up (or company-specific) research model that incorporates fundamentals in its selection process. The ETF identifies companies that the fund advisor sees as having low earnings quality or aggressive accounting that may make results look better to the market than they do to the advisor. The fund also targets companies with expected earnings weakness and weak outlooks, something that happens broadly during market corrections and during economic soft spots.

Be advised that this ETF is very painful to own when stock prices are soaring higher. While the broad market exploded higher from 2013 to 2018, this ETF slid lower and lower. There are also many inverse performance ETF and ETN products for investors who want to have exposure to drops in certain sectors rather than the market as a whole.

10. Volatility to Protect You From Volatility

For investors who don’t mind a little more tricky and harder to explain ETFs (or ETNs) in this case, there is the iPath S&P 500 VIX ST Futures ETN (NYSE: VXX). This ETN invests in CBOE Volatility Index futures contracts, which is also what the media refers to as “the VIX.” This ETN generally rises, sometimes massively, whenever the stock market gets volatile or sells off strongly. It may sound very odd that an investor would buy something with the theme of “volatility” to avoid a crash or a market panic, but that is the case here.

In the October 2018 sell-off, many indexes pulled back 10% into the formal correction, but this ETN rose from about $26.50 at the start of October to as high as $41.00 right before the end of the month. That was a 10% market loss for equity indexes but a 50% gain for the “VIX ETF.” Just keep in mind this gets into serious decay in bull markets, and this ETN is effectively designed to do well only during periods of major selling and uncertainty. There is also the so-called tracking error risk that comes into play.

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