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

No one knows when or why the next stock market sell-off will occur. But we know that market declines are part of the price of entry to unlocking the long-term gains in the stock market.

A correction, defined as a decline of at least 10% from a high, occurs approximately every 1.85 years. A bear market, which is a move of at least 20%, happens approximately every 3.6 years. This means that about half of all corrections develop into bear markets, so investors with a time horizon of at least three to five years should be prepared for a bear market.

By investing in companies with strong business models and reasonable valuations, you can position your portfolio to survive a bear market. Exchange-traded funds (ETFs) invest in dozens, if not hundreds, of companies at once—further reducing volatility.

Here’s why Vanguard S&P 500 Value ETF (VOOV 0.29%)the Vanguard Russell 2000 Value ETF (VTWV 0.68%)and Vanguard Consumer Staples ETF (VDC 0.23%) are all worth buying in 2025, even if there is a sell-off in the stock market.

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1. Vanguard S&P 500 Value ETF

The fund is aimed at value-focused companies such as e.g Berkshire Hathaway, JPMorgan Chase, ExxonMobil, Walmartand more. Many top holdings in the fund are known to return value to shareholders through dividends or buybacks. For example, as you know, Berkshire Hathaway does not pay dividends, but regularly buys back its shares to reduce the number of shares and increase earnings per share.

By not investing in high-flying growth stocks, the Vanguard S&P 500 Value ETF achieves a lower valuation and higher yield than S&P 500. The ETF has a price-to-earnings (P/E) ratio of 20.3 and a yield of 1.9%, compared to a yield of 27.6 P/E and 1.2% for Vanguard S&P 500 ETFwhich tracks the performance of the index.

Compared to the S&P 500, the Vanguard S&P 500 Value ETF is more concentrated in lower growth, lower valuation sectors such as utilities, health care and financials.

Data source: Vanguard.

By not holding top tech stocks like Apple, Microsoftor Nvidiaconsumer discretionary managers like Amazon or Teslaor communications giants such as Alphabet and Meta platformsThe Vanguard S&P 500 Value ETF is significantly underweight technology, consumer discretionary and communications relative to the S&P 500.

Value stocks tend to be priced based on solid existing earnings growth rather than potential growth. These are the type of companies that have already weathered previous recessions and economic cycles and are well positioned to do so again. Therefore, investors in the Vanguard S&P 500 Value ETF can rest easy knowing that they are putting their hard-earned savings to work in quality companies.

2. Vanguard Russell 2000 Value ETF

The Vanguard Russell 2000 Value ETF is as diversified as it gets when it comes to low-cost mutual funds. This ETF has 1,446 holdings, and no single stock makes up more than 0.6% of the fund. Its top holdings are likely unrecognizable to most investors. Rather than going after flashy names, the fund invests in value stocks of various sizes across the US stock market.

The foundation is similar Vanguard Russell 2000 ETFwhich tracks the small-cap stock-focused Russell 2000 index. The Vanguard Russell 2000 Value ETF has fewer holdings because it filters out over 500 small-cap growth stocks.

The Vanguard Russell 2000 Value ETF is a good fit for people who want to put capital to work in the market without focusing on a specific investment thesis. Unlike other Vanguard ETFs that are highly concentrated in a handful of names, the Vanguard Russell 2000 Value ETF is so diversified that it has no clear leader.

Sometimes too much diversification can be a bad thing because an exceptional outperformance from a single stock can be lost in the wash. For example, the top-weighted stock in the Vanguard Russell 2000 Value ETF could triple in a single year and not even move the index by 2%.

However, the fund may be a good fit for people looking for a general basket of value stocks and passive income. The ETF has a P/E ratio of just 14.2 and a yield of 1.7%. The diversification and value focus of the Vanguard Russell 2000 Value ETF makes it a good fit for people concerned about a stock market selloff.

3. Vanguard Consumer Staples ETF

This ETF reflects the performance of the grocery sector. Unlike the highly diversified Vanguard Russell 2000 Value ETF, the Vanguard Consumer Staples ETF is centered around just a handful of holdings, with 46% of the fund invested in Costco Wholesale, Procter & GambleWalmart and Coca-Cola.

In general, the grocery sector is relatively resilient to recession compared to other more cyclical sectors that are vulnerable to economic cycles. Demand for goods sold at retailers like Costco or Walmart or produced by P&G or Coke enjoys constant demand no matter what the economy does. This dynamic is in stark contrast to sectors such as consumer goods or industrials, which benefit from an influx of capital and consumption.

The grocery sector is unlikely to keep pace with a growth-driven recovery in the broader market, but could do well during a stock market sell-off. Even if there is an economic slowdown, leading grocery companies should still be able to hold earnings steady or even grow slightly, while other sectors may see drastic swings in corporate profits.

The Vanguard Consumer Staples ETF has a P/E that is lower than the S&P 500 (24.8) and a yield that is higher than the S&P 500 at 2.5%. Add it all up and this fund is a great way for value investors to collect passive income from a diversified portfolio of companies.