text: what etf's have the least risk and highest performance? etf are traded stock funds. the market is 'risk efficient': investment vehicles with the highest reward also have the highest risk.  as an example, etfs of emerging stock markets have performed best in the last 2 years, but they are extremely risky and volatile (check the market action in the last few weeks).  one way to reduce risk while maintaining performance is to diversify: by holding etfs covering different asset classes (such as us, foreign, small-cap etc...), the risk of your total portfolio will be less than the risk of its components taken separately.