3 Vanguard ETFs Poised to Outperform as the Market Shifts Beyond Big Tech

With the Nasdaq-100 Index up 18.5% year to date, an advantage of more than 700 basis points over the S&P 500, it’s safe to say, at least in broad terms, that tech stocks are performing well and that group remains top-of-mind for many investors.

Tech prominence is understandable, given that the sector accounts for 37.6% of the S&P 500, but beneath the surface of tech dominance, some interesting developments are occurring this year. Not/////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////////ably, small-caps are crushing large-caps and, in recent months, defensive and value stocks are showing signs of life. That means the Goldilocks scenario that some experts have long craved is playing out: The S&P 500 sits near record highs, and more than just tech stocks are contributing to that bullishness.

As market breadth widens, investors can benefit from looking beyond tech and growth stocks. That task is made easier with the following Vanguard exchange-traded funds (ETFs), but market participants shouldn’t procrastinate in evaluating them, as they’re already gaining momentum.

Prescribe this ETF

Investors searching for names that are examples of “quiet warriors” ought to peruse healthcare stocks, because that group is on fire in arguably nondescript fashion. Just look at the Vanguard Healthcare ETF (VHT 1.65%). For the month ending July 10, that fund is up a techy 5.6% and is within spitting distance of its 52-week high.

Renewed enthusiasm for this $16.6 billion ETF is supported by compelling fundamentals, including the fact that, among bullish second-quarter earnings guidance, the only sector outpacing healthcare is tech.

Drilling down on longer-ranging catalysts for this Vanguard ETF, biotech, which accounts for 22.8% of the portfolio, and weight-loss drugs fit the bill. Goldman Sachs recently upped its 2030 global sales forecast for obesity drugs by 15%. That’s relevant to investors considering this ETF because the fund devotes 14% of its weight to Zepbound maker Eli Lilly (LLY 2.19%).

This ETF, which holds 429 stocks, is appropriate for long-term investors not only because healthcare is considered a defensive sector, but also because the fund charges just 0.09% per year, or just $9 on a $10,000 stake. That’s far below the category average of 1.02%.

Value may be vaunted again

From 1980 through 2007, value stocks soundly outpaced their growth rivals, but that script flipped when equities rebounded following the worst of the global financial crisis. Now, it’s been nearly two decades of frustration for value investors, but that scenario could certainly change if investors wholeheartedly look beyond tech. Count the Vanguard Value ETF (VTV 0.35%) as a logical beneficiary of that shift.

Indicating that that transition may already be under way, this ETF, which tracks the CRSP U.S. Large Cap Value Index, is up 14.8% year to date. Home to 309 stocks, this $179 billion ETF may be at the right place at the right time because some experts believe value stocks are under-owned, and with the group recently showing signs of life, more asset allocators may be lured in, supporting a durable rally.

It might surprise some investors to learn that this ETF’s largest holding is, believe it or not, Micron Technology (MU +5.07%). That’s a reminder that, as with other investing styles, value is sector-agnostic, and some tech stocks can be value plays too. After all, this ETF allocates 13.4% of its weight to that sector.

That said, the Vanguard Value ETF does have traditional value-sector exposures, as highlighted by a combined 36.5% weight to financial services and industrial names. Plus, this ETF is inexpensive to own. It charges just 0.03% annually, compared to the average fee of 0.85% on rival products.

Small but mighty

Like value stocks and small-caps, though more volatile than large-caps, have for generations delivered impressive performances, only to trail over much of the aforementioned large-cap growth era. There were signs of improvement on that front last year, and in 2026, smaller stocks are accelerating with the Vanguard Small-Cap ETF (VB +0.24%) up 15.4% year to date.

This $78.7 billion ETF, which tracks the CRSP U.S. Small Cap Index, isn’t riding high because of hopium. Rather, its rally is rooted in credible fundamentals, including valuations that remain tempting relative to larger stocks and increasingly bullish forward earnings estimates on small-caps.

With 1,310 stocks, this Vanguard fund is a small-cap ETF that even risk-aware investors may like. The fund allocates about a third of its portfolio to mid-cap stocks, and the average market value of its holdings is $10.2 billion, which is mid-cap, not small-cap, territory. Those traits can reduce volatility relative to ETFs that skew toward smaller holdings by market value.

Of course, this ETF aligns with Vanguard’s tradition of low fees. It charges just 0.03% per year compared with 0.96% on rival funds.