Funds That Are Designed to Help Investors Withstand Wild Market Swings

Katie Stockton believes she has found a strategic solution for investors seeking protection during periods of intense market volatility.

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Stockton oversees the Fairlead Tactical Sector ETF (TACK), a fund built to adapt during turbulent times. Unlike many ETFs, it doesn’t follow a traditional market index, giving it greater flexibility.

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“We aim to help investors benefit from market upswings by rotating between sectors, while also limiting losses during downturns,” said Stockton, founder of Fairlead Strategies, during a recent appearance on CNBC’s “ETF Edge.” “Reducing the depth of losses makes it easier to recover over time, which can be a significant long-term advantage.”

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What sets TACK apart in the current market environment, according to Stockton, is its multi-strategy approach. Rather than relying on a single investment model, the ETF incorporates various strategies to respond to shifting market conditions. Since former President Donald Trump’s announcement of “reciprocal” tariffs on April 2, TACK has declined by just over 4%, compared to the S&P 500’s 6.9% drop over the same period.

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A core feature of TACK is its monthly rotation through all 11 sectors of the S&P 500. This sector rotation approach allows the ETF to move in and out of areas of the market based on technical indicators and trends.

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“We’ve exited our position in technology,” Stockton said. “Some sectors we’ve previously favored have lost momentum, so we’ve shifted away from them.”

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As of April 16, TACK’s leading sector exposures included consumer staples, utilities, and real estate — areas typically considered more stable or defensive during market downturns.

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Year-to-date, TACK is down around 4%, as of the market’s close on Thursday. While that’s a decline, it’s far less severe than the losses seen in other sector-focused or strategy-based ETFs.

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For example, the Invesco Top QQQ Trust (QBIG), which holds the top 45% of companies within the Nasdaq-100 index, has plummeted 22% in 2025. The steep selloff in large-cap tech names has taken a heavy toll on funds concentrated in that space.

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Even more dramatic is the performance of the GraniteShares YieldBoost TSLA ETF (TSYY), which has dropped 48% since the beginning of the year. That fund, which relies heavily on options strategies linked to Tesla stock, has struggled amid Tesla’s own challenges and the broader tech sector’s retreat.

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In contrast, Stockton’s TACK fund has demonstrated resilience, something that has drawn praise from market professionals.

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Troy Donohue, head of Americas portfolio trading at BTIG, believes Stockton’s approach is particularly relevant during the recent wave of selling.

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“TACK is a strong example of how investors can stay flexible during tough market conditions,” Donohue commented. “It’s encouraging to see an ETF that’s managed to hold up relatively well during this period of significant drawdown.”

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This flexibility is especially appealing to investors looking for a more active and tactical strategy to weather the market’s ups and downs. By rotating into sectors that show technical strength and moving out of weaker ones, TACK aims to limit downside exposure without having to rely on broader market trends.

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Stockton emphasizes that minimizing deep losses is crucial because it reduces the time and performance required to recover. A fund that avoids steep drawdowns doesn’t need massive gains to return to previous highs — an advantage that’s especially meaningful in choppy or bearish markets.

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While other ETFs that follow specific sectors or growth-heavy strategies have taken major hits, TACK’s balanced and adaptive structure has helped it avoid the worst of the market’s turmoil so far this year.

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Still, Stockton acknowledges that no strategy is entirely immune to broader market risks. But she believes that the combination of tactical adjustments and sector diversification offers a way to stay invested while managing risk more effectively.

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As market uncertainty continues — driven by shifting trade policies, interest rate questions, and geopolitical concerns — investors may increasingly seek out active strategies like TACK that aren’t locked into one approach.

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For those looking to maintain equity exposure without taking on the full brunt of market swings, the Fairlead Tactical Sector ETF presents a compelling alternative. Its performance during recent volatility has highlighted its potential as a tool for both preserving capital and capturing gains through thoughtful sector rotation.

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