3 Unstoppable Vanguard ETFs to Buy Even If There’s a Stock Market Sell-Off in 2025

With the broader stock market indices hovering around all-time highs, some investors may fear a sell-off is creeping on the horizon in 2025. After all, share prices have outpaced earnings growth, leading to a relatively expensive market.

Valuation concerns could lead to a pullback in share prices in 2025, but that doesn’t mean investors should sell off their positions or stop putting new capital to work in the market. However, people should take great care to ensure that they are investing in quality companies that can justify their valuations with earnings growth over time rather than chasing hot stocks to make a quick buck.

Exchange-traded funds (ETFs) can be excellent ways to invest in the market while maintaining diversification. Investment management firm Vanguard offers several low-cost ETFs that target different themes and stock market sectors. Here’s why Vanguard Dividend Appreciation ETF (VIG 0.18%), Vanguard Communications ETF (VOX 1.04%)and Vanguard S&P 500 ETF (VOO 0.33%) stand out as good buys now.

A person smiling while sitting at a computer and holding a pair of glasses.

Image source: Getty Images.

Boost your passive income from dividend growing companies

The Vanguard Dividend Appreciation ETF focuses on companies that are well positioned to continue to raise their dividends in the coming years. Top holdings include e.g Apple, Broadcom, JPMorgan Chaseand Microsoft. Apple and Microsoft have returns below 1%, but they have track records of raising their dividends, as well as buying back shares.

Many of the top holdings in the ETF are well-known industry leaders. The fund’s focus on earnings growth makes it an excellent choice for investors interested in quality over high-yield stocks at cheap prices.

Granted, many of the fund’s top holdings are hovering around all-time highs and have seen their valuations expand. But the fund is well diversified, with only a 30.7% concentration in the top 10 holdings, and no individual holding makes up more than 5% of the fund.

The Vanguard Dividend Appreciation ETF has a yield of 1.7% — which isn’t high-yield territory, but it’s better than the 1.2% yield of S&P 500.

The communications sector offers a rare mix of growth and value

The Vanguard Communications ETF reflects the performance of the communications sector. The fund has been one of the best-performing Vanguard ETFs year-to-date — up more than 35%. And yet, it’s still a great value because many top communications stocks have impeccable earnings and cash flow growth.

Meta platforms, Alphabetand Netflix are typically considered technology companies, but they are actually classified under the communications sector and dominate the Vanguard Communications ETF with a total weighting of 52.4%. The top 10 holdings in the fund, which includes legacy media companies Walt Disney and Comcastand telecommunications companies Verizon Communications, T-Mobileand AT&Tconstitutes 69.8% of the fund. The fund’s heavy concentration in a handful of names means it is not very diversified and therefore only worth buying if you have high conviction in the top holdings – especially Meta and Alphabet.

Although they are both hovering around all-time highs, Meta and Alphabet stand out as solid growth stocks to buy in 2025. As you can see in the following chart, both companies have a reasonable forward price-to-earnings (P/E) ratio. ratios, especially compared to other megacap growth stocks.

TSLA PE Ratio (Forward) Chart

TSLA PE Ratio (Forward) data of YCharts

Granted, forward P/E numbers should be taken with some skepticism, as they are based on analyst consensus estimates for the next 12 months of earnings, which can vary wildly based on external factors, macroeconomic conditions or company decision-making. But still, the fact that Meta and Alphabet are cheaper than other megacap growth stocks despite rising so much over the past few years makes them attractive choices for investors concerned about the valuation of the ​​technology-focused companies.

Given that Meta and Alphabet rely on ad revenue, it’s worth understanding that their earnings could take a hit during a general economic downturn. But people who believe platforms like Alphabet-owned Google and YouTube or Meta-owned Instagram will continue to grow their market share of the advertising industry should consider buying and holding the Vanguard Communications ETF through periods of volatility.

A plug-and-play tool to put your hard-earned savings to work

With $1.37 trillion in net assets, the Vanguard S&P 500 ETF is one of the largest S&P 500 index funds on the market. The fund has an expense ratio of just 0.03%, or $3 for every $10,000 invested. In comparison, the Vanguard Communications ETF has an expense ratio of 0.1% and the Vanguard Dividend Appreciation ETF has an expense ratio of 0.06%.

The Vanguard S&P 500 ETF mirrors the performance of the S&P 500, which has become more top-heavy in recent years as the largest companies have grown progressively more valuable and outpaced the gains of the rest of the index. The top 10 holdings in the S&P 500, which are Apple, NvidiaMicrosoft, AmazonAlphabet, Metaplatforms, Tesla, Berkshire HathawayBroadcom and JPMorgan Chase now make up 36.2% of the entire index.

While some investors may feel there are better ways to put capital to work than buying top growth stocks around all-time highs, it’s important to understand that valuations can become reasonable over time as long as companies grow earnings. For the most part, today’s top growth stocks are growing profits and have long trajectories for future earnings growth. So while top growth stocks may look expensive right now and may provide lousy short-term returns, they should still be excellent long-term investments.

Therefore, people with an ultra-long investment time horizon should still consider investing in an S&P 500 index fund.

Three ETFs centered around industry-leading companies

The Vanguard Appreciation ETF, the Vanguard Communications ETF and the Vanguard S&P 500 ETF are all hovering around all-time highs. But they may still be worth buying even if there is a sell-off in 2025 because all three funds focus on industry-leading quality companies.

Even the best companies can see a decline in earnings during an economic downturn. But leading companies have many advantages during a downturn that can allow them to gain market share, buy out companies on the cheap, or continue to invest in research and development when competitors struggle to cope.

No one knows what the market will do in 2025, but investing in quality companies – or ETFs with quality companies – is a recipe for long-term wealth building. So despite big gains in recent years, long-term investors should still consider buying the Vanguard Appreciation ETF, Vanguard Communications ETF and Vanguard S&P 500 ETF even if there is a market selloff in 2025.

JPMorgan Chase is an advertising partner of Motley Fool Money. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister of Meta Platform CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Daniel Foelber holds positions at Walt Disney. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Berkshire Hathaway, JPMorgan Chase, Meta Platforms, Microsoft, Netflix, Nvidia, Tesla, Vanguard Dividend Appreciation ETF, Vanguard S&P 500 ETF and Walt Disney. The Motley Fool recommends Broadcom, Comcast, T-Mobile US and Verizon Communications and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a non-disclosure policy.