Many people turn to riskier, high-beta investments in the hopes of generating high returns. But executives at Invesco PowerShares say low-volatility exchange-traded funds can actually help investors make more money over the long term.

Invesco PowerShares officials and others argued at a Tuesday meeting in Manhattan that the use of low-volatility ETFs is helping advisors lessen risk and obtain strong returns. Low-volatility ETFs generally invest in stocks with lower price fluctuations that may perform well over time.

Classical investment theory, as represented by the capital asset pricing model (CAPM), says that if one takes greater risks, one should obtain higher returns, according to Dan Draper, head of Invesco PowerShares. But Draper said ETFs are now allowing portfolio managers to slice up the market in smaller bits and achieve greater diversification while reducing risk.

“Ironically, you see in low volatility, and you see this in fixed income as well as equities and other asset classes, that there are anomalies for long periods of time, whereby taking lower risk, you can get higher returns,” according to Draper. The low-volatility philosophy, he added, is, “at its heart, a contrarian style of investing.”

However, academics have been writing about “this anomaly of low-volatility investing for at least 20 years,” added Craig Lazzara, managing director of S&P Dow Jones Indices.

He agreed the low-volatility model, also called the high-beta effect, is a challenge to the prevailing capital asset pricing model. He said low volatility performs better in both up and down markets. “It will give you a much smoother path,” Lazzara said.

Lazzara said that academics challenging the conventional CAPM have found that, over long periods, lower-beta stocks are outperforming high-beta stocks.

“This is very troubling,” Lazzara said. He added one reason why the low-volatility model works is that investors are overpaying for high-beta stocks. He said, for example, using the low-volatility model, one would have held zero percent in tech stocks in the last tech-stock crash.