There are a myriad of specialized ETFs available, that claim to offer some form of hedging against market volatility. IQ Merger Arbitrage ETF (MNA), Goldman Sachs Hedge Industry VIP (GVIP), Nasdaq 100 Covered Call (QYLD) and IQ Hedge Multi-Strategy Tracker (QAI) are just a few of the available options. The annual expense ratios on these funds run from 0.45% (GVIP) to 0.79% (QAI) so they are not cheap to own. Hedging doesn't have to be exotic, though. The iShares Edge MSCI Minimum Volatility USA (USMV) charges an annual expense ratio of just 0.15% and is more effective at hedging against market volatility than you might think.
USMV isn't a value fund. In fact, the P/E ratio of the fund is 24.16 which is higher than the S&P 500 (20.50). And while a typical value fund is highly correlated to the S&P 500, the beta of USMV is just 0.74. Let's have a look at what that means, using Portfolio Visualizer.
The 60/40 S&P 500 - USMV portfolio captured nearly all of the S&P 500's annual growth rate, at a lower standard deviation. Of course, we also want to look at how USMV might help or hurt the portfolio, during a bear market - like the July 2015 to February 2016 period:
Proving that bonds don't always zig when stocks zag, the 2015-16 bear took no prisoners. USMV did its job, though, limiting the damage better than the 60/40 stock/bond portfolio did - and thoroughly trouncing the S&P 500 index. The iShares Edge MSCI Minimum Volatility fund appears to be a decent hedge against market volatility, under several different market conditions. Unlike the S&P 500 index, USMV is not top-heavy with FAANG (Facebook, Amazon, Apple, Netflix, Google) so you not only get the benefits of the hedge, but also exposure to a different mix of large-cap stocks.