Prepare to be vexed by the VIX.

After global markets dropped then dramatically rebounded at the end of June, volatility, often measured by the CBOE Volatility Index, or VIX, will be of central concern to investors throughout the rest of the year, according to a recent report by New York-based BlackRock.

But markets aren’t pricing in the volatility risk, according to Heidi Richardson, head of investment strategy at BlackRock’s U.S. iShares.

“Volatility spikes whenever there’s bad news in the system,” Richardson says. “Looking at the Brexit vote, the attempted coup in Turkey, ongoing issues with Italian banks and the upcoming U.S. election, there’s more volatility on the horizon, and it can be really corrosive to client portfolios.”

In the BlackRock Investment Institute’s “Mid-Year 2016 Global Investment Outlook,” the asset manager wrote that lower equity returns, extraordinary monetary policy and macro-level uncertainty increase the risk of volatility.

BlackRock identified political uncertainty related to the United Kingdom’s vote to leave the European Union last month and the rise of populism in the U.S. and elsewhere as a direct challenge to “trade, economic growth and markets.”

“When we talk to clients, their response falls into discussions of three buckets,” says Richardson. “Either they want to go completely risk-off and invest in things with low correlation, or they want some equity exposure but they want to do it with volatility in mind because they’re aging or they’re long-term investors who embrace the volatility.

“There’s no solution for everyone. The most significant theme is that we should be structuring portfolios with the potential volatility in mind.”

Any strategy to ride out volatility should begin with diversification across asset classes, says Richardson, but the low-return environment should also be kept in mind.

She says that advisors and investors may want to seek strategic sources of income, like dividend-paying equities, to ride out the instability.

“You’re going to see some elevated valuations, so advisors are going to have to be more selective,” she says. “Dividend growers haven’t been the best performers over the past year. It’s worth looking into smart beta and factor investing to find exposure to pockets of attractive valuation.”

Low volatility ETFs, like the iShares Edge MSCI Minimum Volatility U.S.A. ETF (USMV) offer investors a passive vehicle designed to avoid temperamental markets, Richardson says.

Municipal bonds allow advisors to provide their clients a tax-advantaged income stream, says Richardson.

“I even think that some of these asset classes that fall somewhere between stocks and bonds, like preferreds, offer an attractive source of income,” she says.

Investors could also look globally for markets with lower valuations that may have been overlooked, says Richardson, who recommended the use of single-country funds for targeted exposure.

Even better, however, are the opportunities in emerging market debt, says Richardson. “In dollar currency terms, not the local currency, because investors don’t need to invite currency risk into their bond portfolios.”

Gold ETFs can also be used to provide portfolios with some ballast against dramatic market swings, says Richardson.

In its midyear outlook released earlier this month, BlackRock said that it is “cautious” on U.S. equities; underweight on European equities; and neutral on Japan, Asia and emerging markets.

While the firm is positive on municipal bonds, emerging market debt, and U.S. and European credit, it’s neutral on U.S. Treasurys, European sovereigns, Asian fixed-income and commodities.

“Even the VIX isn’t pricing in any of the disruption in the geopolitical landscape,” says Richardson. “There’s an enormous anti-establishment movement, not just in the U.S., but in places like Germany, France and the Philippines, that can be damaging to markets moving forward. It’s not being priced in anywhere. That’s why we’re concerned about mitigating the risk in client portfolios.”