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Top Vanguard ETFs to Consider During Market Volatility
Stock market volatility can be unsettling, especially for new investors. Nonetheless, this volatility is a small price to pay for potential long-term gains.
Investing in exchange-traded funds (ETFs) that diversify across a wide range of stocks can help reduce volatility. However, even ETFs can experience sharp declines during market sell-offs. The good news? These pullbacks often present excellent buying opportunities.
Three Vanguard ETFs have seen declines greater than 10% in 2025. Despite this, they remain strong picks for long-term investors.
Image source: Getty Images.
1. Vanguard Small-Cap ETF
As of now, shares of the Vanguard Small-Cap ETF (NYSEMKT: VB) have dropped approximately 15% from the peak earlier in 2025. This decline is less severe than the steep drop experienced in early April after former President Donald Trump’s announcement of reciprocal tariffs.
The ETF includes 1,357 small-cap stocks, which tend to be more volatile than large-cap stocks. Economic downturn fears have particularly affected this Vanguard ETF.
However, the ETF’s portfolio boasts a relatively low valuation. The average trailing-12-month price-to-earnings ratio for its stocks is 18.6, significantly lower than the S&P 500’s earnings multiple of nearly 24.5.
Historically, small-cap stocks have outperformed large-cap stocks over the long term. While this trend may not hold in recent years, it’s possible that small-cap stocks will rebound, providing significant returns for patient investors in the Vanguard Small-Cap ETF.
2. Vanguard Russell 1000 Growth ETF
The Vanguard Russell 1000 Growth ETF (NASDAQ: VONG) has fallen 13% below its 2025 high. At one point, the ETF was down over 23% but has since seen a rebound.
This ETF aims to track the Russell 1000 Growth Index, which encompasses growth stocks from the top 1,000 U.S. companies by market capitalization. The ETF currently holds 394 stocks, including major players like Apple, Microsoft, Nvidia, Amazon, and Meta Platforms, which together represent about 42.5% of the portfolio.
When these industry giants experience downturns, the Vanguard Russell 1000 Growth ETF feels the impact. Nevertheless, the rise of artificial intelligence (AI) is expected to provide a significant boost for companies like Apple and Microsoft in the long term.
Not surprisingly, the Vanguard Russell 1000 Growth ETF has been Vanguard’s top performer over time, achieving an average annual return of around 15.8% since its inception in 2010. While future performance can’t be guaranteed, expectations remain high for this ETF.
3. Vanguard Mega Cap Growth ETF
Shares of the Vanguard Mega Cap Growth ETF (NYSEMKT: MGK) are down nearly 13% from their last peak. Its performance closely mirrors that of the Vanguard Russell 1000 Growth ETF.
This similarity stems from the fact that their portfolios are quite alike. The Vanguard Mega Cap Growth ETF’s top five holdings align with those of its counterpart, but this fund contains only 69 stocks with a median market cap of $1.5 trillion.
As AI adoption continues to grow, many of the Vanguard Mega Cap Growth ETF’s stocks stand to benefit. This fund has delivered an average annual return of approximately 12.5% since its launch in 2007, suggesting that long-term investors may find value in holding it.
Is Now the Right Time to Invest?
Before deciding to invest in the Vanguard Mega Cap Growth ETF, it’s important to consider the following:
The analyst team recently identified ten stocks viewed as strong investment opportunities right now. Notably, the Vanguard Mega Cap Growth ETF did not make this list, indicating that other stocks could yield higher returns in the coming years.
For example, if you had invested $1,000 in Netflix when it was first recommended on December 17, 2004, your investment would now be worth $611,271. Similarly, an investment in Nvidia on April 15, 2005, would have grown to $684,068.
The Stock Advisor program reports an average total return of 889%, impressively outperforming the S&P 500’s 162% return.
John Mackey, former CEO of Whole Foods Market, is a board member of The Motley Fool. Randi Zuckerberg, a former Facebook director, is also on the board. Keith Speights holds positions in Amazon, Apple, Meta Platforms, and Microsoft. The Motley Fool recommends investments in these and other stocks as well.
The views and opinions expressed herein are those of the author and may not reflect those of Nasdaq, Inc.
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