Data indicates that investors are shifting back to equities as what some termed a dead-cat bounce has morphed into a four-year bull market.

Nevertheless, clients are not necessarily in pursuit of the hottest and most-hyped issues. Low-volatility stocks are in demand, as evidenced by the popularity of low-volatility ETFs and the ongoing expansion of available choices.

BlackRock has announced its iShares group of low-volatility ETFs, launched in late 2011, has topped $4 billion in assets. Both iShares MSCI Emerging Markets Minimum Volatility ETF nd iShares MSCI USA Minimum Volatility ETF now have more than $1 billion in assets, gathering a combined total of over $1.3 billion in new inflows since January. In addition, iShares MSCI EAFE Minimum Volatility ETF and iShares All Country World Minimum Volatility ETF continue to grow.

Other ETF sponsors have moved into the market.

In February, State Street Global Advisors introduced the SPDR Russell 2000 Low Volatility ETF and the SPDR Russell 1000 Low Volatility ETF.

Also in February, the PowerShares S&P MidCap Low Volatility and PowerShares S&P SmallCap Low Volatility Portfolio began trading. These ETFs followed the large-cap PowerShares S&P 500 Low Volatility Portfolio, which launched last year.

Why is there so much interest in low volatility ETFs? Because several studies have indicated that low-volatility portfolios have produced higher-than-average returns with, of course, less volatility. For example, a paper co-authored in 2012 by Nardin Baker of Guggenheim Partners Asset Management and economist Robert Haugen, who died recently after decades of pioneering research in this area. In this papers, the authors state they provide “comprehensive additional evidence to support the notion that bearing relative risk in the equity markets of the world yields an expected negative reward in all developed countries and emerging markets.”

One such study led to a paper co-authored last year by Nardin Baker of Guggenheim Partners Asset Management and economist Robert Haugen, who died recently after decades of pioneering research in this area. In this paper, the authors state they provide “comprehensive additional evidence to support the notion that bearing relative risk in the equity markets of the world yields an expected negative reward in all developed countries and emerging markets.”

The implication is that low risks have produced high rewards, and investors are flocking to ETFs holding stocks such as Eli Lilly, Duke Energy, and General Mills.