2 Vanguard ETFs to Buy During the US Market Selloff

President Donald Trump’s recent address to the nation did little to calm investor concerns around the ongoing conflict with Iran, which has now entered its fifth week. Markets don’t like uncertainty, and right now there’s plenty of it.

Year to date, as of April 2, 2026, the S&P 500 is down 4.36% on a price return basis. Beneath the surface, though, there’s been a shift. Breadth has improved, with non-Magnificent Seven stocks holding up better, while mega-cap tech has done most of the dragging.

Now, this isn’t a call to panic sell or try to time the market. If anything, periods like this are a good gut check. If the volatility is making you uncomfortable, it may be a sign that your current asset allocation doesn’t match your true risk tolerance. That’s especially common among newer investors who haven’t experienced sustained drawdowns before.

That doesn’t mean you need to run to cash, pile into bonds, or start using complex products like buffer ETFs. If this selloff has you uneasy, there are simpler ways to dial down risk while staying invested. Vanguard offers a couple of ETFs that have historically been less volatile than the broader market. Here are two I like.

Consumer Staples Stocks

There are three sectors traditionally considered defensive: consumer staples, utilities, and healthcare. Demand for all three tends to be non-cyclical. That typically results in more stable earnings. That said, not all defensive sectors behave the same way.

Utilities, for example, are no longer the slow-moving “widows and orphans” stocks they once were. The growing power demands from artificial intelligence and rising infrastructure costs tied to climate risks have changed the landscape. Many utilities also carry high debt loads, which can become a headwind when interest rates rise.

Healthcare is also mixed. Insurance companies can face regulatory pressure, while biotech can be highly volatile. The more stable segments tend to be large diversified pharmaceutical firms and medical technology companies.

That’s why consumer staples stand out. These are companies that manufacture, distribute, and sell essential goods like food, beverages, and household products. Demand is steady, margins are often strong, and global scale provides resilience.

The Vanguard Consumer Staples ETF (NYSEArca: VDC) is a straightforward way to access this space. It holds 104 companies and, according to testfolio.io, has demonstrated a beta of 0.57 over an eight-year period from February 2018 to present, compared to the S&P 500’s beta of 1. That’s a meaningful reduction in volatility. You also get some income, with a 2.04% 30-day SEC yield.

The trade-off is valuation. Consumer staples are widely viewed as high-quality businesses, and the market prices them accordingly. VDC’s portfolio currently trades at about 27.8 times earnings. Personally, paying a multiple closer to 25 times would be more comfortable, but quality rarely comes cheap.

That quality shows up in the fundamentals. The portfolio has an average return on equity of 28.2%, with many holdings generating strong margins and operating globally. Fees are also low, as expected from Vanguard. The expense ratio is just 0.09%, or about $9 annually on a $10,000 investment.

Minimum Volatility Stocks

Some investors may not like the idea of concentrating in a single sector, even a defensive one. That’s a fair concern. If you want a more diversified approach to lowering risk, the Vanguard U.S. Minimum Volatility ETF (BATS: VFMV) is worth a look.

This is what’s known as a factor or smart beta strategy. Instead of tracking a traditional index, it uses a quantitative model to build a portfolio that aims to minimize overall volatility. The key phrase here is “in the aggregate.”

Unlike simple low-volatility strategies that pick individual stocks with the lowest historical volatility, VFMV takes a portfolio-level approach. It looks at how stocks move relative to each other and constructs a mix that reduces overall portfolio swings, even if the individual holdings aren’t all low-volatility on their own.

This approach helps avoid one of the common pitfalls of low-volatility investing, which is unintended sector concentration. Traditional low-volatility screens often end up heavily overweight utilities or consumer staples.

VFMV, by contrast, stays more sector-neutral. As a result, its sector exposure still resembles the broader market, with meaningful allocations to technology, financials, and consumer discretionary, just constructed in a way that dampens volatility.

Because it’s an actively constructed factor strategy, fees are slightly higher than a plain index ETF, but still reasonable. VFMV charges 0.13%, which is quite competitive for this type of strategy.