The 5 Safest Vanguard Funds to Own in a Volatile Market

The safest Vanguard funds can help prepare investors for continued market tumult, but without high fees.

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Vanguard funds are known as practical tools for the buy-and-hold-forever crowd. Their straightforward strategies, broad portfolios and generally low costs are conducive to investors who want to sit back and let compounding do the work for a decade or two. 

But in a pinch, the safest Vanguard funds can also be used to play a little defense – something investors could very well use in the current market environment.

The S&P 500 is down nearly 5% so far in 2025 and briefly entered correction territory in March. Uncertainty around the Trump administration's tariff policies has sparked a "resurgence of emotional-driven selling," says Mark Hackett, chief market strategist at Nationwide.

"Wall Street strategists have begun to capitulate on their year-end targets," he adds, with "UBS warning of another 8% decline, while HSBC downgraded their view of U.S. stocks."

How we chose the safest Vanguard funds

To find the safest Vanguard exchange-traded funds (ETFs) and mutual funds for a volatile market, we looked for those that represent some of the most useful defensive sectors and strategies, including those that contain the best dividend stocks or the best health care stocks.

We also targeted funds that boast Vanguard's below-average expenses. "True, some competitors can now match or even undercut Vanguard on fees for broad market exposure," writes Alec Lucas, director of manager research and active funds research for Morningstar. "But Vanguard's burgeoning advice business could help it keep or even extend that lead."

Just remember the rub when it comes to positioning your portfolio for volatility: Markets will eventually stabilize Indeed, in the same note, Hackett noted that corporate earnings are expected to grow by double digits in the next 12 months and many stress indicators such as the Cboe Volatility Index (VIX) have steadied. 

So if you do jump into the safest Vanguard funds for short-term defense, pay attention and be nimble.

With that in mind, here are five of the safest Vanguard funds to own in a volatile market. When applicable, we'll let you know when these portfolios come in both ETF and mutual fund form.

Data is as of March 28. Dividend yields represent the trailing 12-month yield, which is a standard measure for equity funds. 

Kyle Woodley

Kyle Woodley is the Editor-in-Chief of WealthUp, a site dedicated to improving the personal finances and financial literacy of people of all ages. He also writes the weekly The Weekend Tea newsletter, which covers both news and analysis about spending, saving, investing, the economy and more.

Kyle was previously the Senior Investing Editor for Kiplinger.com, and the Managing Editor for InvestorPlace.com before that. His work has appeared in several outlets, including Yahoo! Finance, MSN Money, Barchart, The Globe & Mail and the Nasdaq. He also has appeared as a guest on Fox Business Network and Money Radio, among other shows and podcasts, and he has been quoted in several outlets, including MarketWatch, Vice and Univision. He is a proud graduate of The Ohio State University, where he earned a BA in journalism.

You can check out his thoughts on the markets (and more) at @KyleWoodley.

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