Though the U.S. stock market is advancing to the peak level it set in late January on surging corporate profits and an accelerating economy, trade tensions are blocking the road of the bulls. This is especially true as tensions between the world’s largest economies flared up once again this week.

Escalating Trade Tensions

In the latest development, China retaliated with additional tariffs of 25% on $16 billion worth of U.S. goods, including vehicles such as large passenger cars and motorcycles and energy products. The levies will be effective Aug 3, the same day the United States starts hitting duties of 25% on the same amount of imports from China. Both countries already implemented tariffs on $34 billion worth of each other’s goods in July.

Further, China has threatened to impose tariffs on $60 billion worth of American goods if the United States places more tariffs on Chinese imports. The list includes 5,207 new products, including aircraft, soya bean oil, smoked beef, coffee and flour imported from the United States, with charges ranging from 5-25%. This threat came following the news that Trump is mulling over raising tariffs from a proposed 10% to 25% on $200 billion of Chinese goods.

Renewed trade clash between the United States and China has prompt investors to re-access their portfolio, leading to higher demand for lower-risk securities. As a result, low-risk ETFs are in vogue with many hitting new one-year highs in the latest trading session. Below, we have highlighted those that could perform well in a volatile market, reducing the risk of a downside:

iShares Edge MSCI Min Vol USA ETF (USMV – Free Report)

This fund offers exposure to 206 U.S. stocks having lower volatility characteristics than the broader U.S. equity market by tracking the MSCI USA Minimum Volatility Index. It is well spread across a number of securities, with none holding more than 1.6% of assets. From a sector look, information technology, healthcare, consumer staples, and financials take the top four spots with a double-digit allocation each. With AUM of $15.3 billion, the product charges 0.15% in expense ratio and trades in solid average daily volume of 1.8 million shares. It has gained 6.2% so far this year and hit a new high of $55.62. The fund has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.