The best Vanguard exchange-traded funds (ETFs) to own in 2023 and 2024 were loaded with artificial intelligence (AI) stocks. That's not the case in 2025. Vanguard's tech-heavy funds, including the Vanguard Information Technology ETF and Vanguard Mega-Cap Growth ETF, are among its worst performers so far this year.
However, with 91 ETFs in the Vanguard family, there are always some good alternatives for investors, regardless of what the stock market is doing. Here are three Vanguard ETFs to buy with $500.
1. Vanguard Utilities ETF
You can scoop up one share of the Vanguard Utilities ETF (NYSEMKT: VPU) right now for around $167. I think this fund is an especially great investment for three primary reasons.
First, the Vanguard Utilities ETF focuses on the U.S. utilities sector, which usually holds up well during times of market volatility. This ETF owns 69 utility stocks, with its top holdings including Florida Power & Light parent NextEra Energy, Southern Company, Duke Energy, Constellation Energy, and American Electric Power.
Second, many utility companies have surprisingly good long-term growth prospects. The construction of new data centers to keep up with AI demand is providing a strong tailwind for the utilities sector. The Vanguard Utilities ETF is poised to benefit from this trend.
Third, this Vanguard ETF pays a 30-day SEC yield (the projected dividend yield of the fund's holdings, divided by its total assets) of 2.89%. Income investors should like this yield, but so should other investors because it bolsters the fund's total return.
2. Vanguard Consumer Staples ETF
Another $218 or so of your initial $500 will get you a share of the Vanguard Consumer Staples ETF (NYSEMKT: VDC). Like the Vanguard Utilities ETF, this fund is a solid pick when uncertainty reigns in the stock market.
As its name indicates, this Vanguard ETF focuses on U.S. consumer staples stocks. It owns 103 of them, with top holdings including large wholesale club operator Costco Wholesale, consumer goods giant Procter & Gamble, huge retailer Walmart, and blue chip food and beverage leader Coca-Cola, as well as multinational tobacco company Philip Morris International.
Consumer staples stocks tend to be safe havens during economic downturns. Even if consumers reduce spending to stretch their paychecks further, they still buy food, beverages, personal care items, and (for some, anyway) tobacco products.
The Vanguard Consumer Staples ETF has performed pretty well over the long term: Its average annual return since the fund's inception on Jan. 26, 2004, is 9.62%. This ETF also pays a forward dividend yield of 2.16%.
3. Vanguard Intermediate-Term Treasury ETF
With the remaining amount left from your initial $500, you'll be able to buy a share of the Vanguard Intermediate-Term Treasury ETF (NASDAQ: VGIT) and still have money left over. This Vanguard ETF hasn't delivered a great long-term return in the past, but it's performing quite well these days.
The Vanguard Intermediate-Term Treasury ETF invests primarily in U.S. Treasury bonds with average maturity of between five and 10 years. It currently owns 105 bonds with average effective maturity of 5.6 years.
Many investors view U.S. Treasury bonds as the safest place to park their money when the stock market is highly volatile. The intermediate-term Treasury bonds owned by this Vanguard ETF provide a "middle-of-the-road" alternative between short-term and long-term Treasuries.
This fund doesn't typically offer prospects for tremendous gains. Since its inception on Nov. 19, 2009, its average annual return is only 2.11%. However, it currently pays a 30-day SEC yield of 4.09%. That's relatively safe income that many investors wouldn't turn their noses up at during a period when the stock market is exceptionally turbulent.
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Keith Speights has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Constellation Energy, Costco Wholesale, NextEra Energy, and Walmart. The Motley Fool recommends Duke Energy and Philip Morris International. The Motley Fool has a disclosure policy.
