This Vanguard ETF Has Weathered Every Recession in Its History

There have been two recessions over the past 20 years, according to the National Bureau of Economic Research (NBER), and this Vanguard exchange-traded fund (ETF) has outperformed the market in both.

The Vanguard Consumer Staples ETF (NYSEMKT: VDC) is one of Vanguardʻs oldest ETFs, launched in January 2004. It has been one of Vanguardʻs best performers throughout the two recessions since then -- the Great Recession from December 2007 to June 2009 and the COVID-19 recession from February through April 2020.

It also beat the market during the 2022 bear market, which saw two straight quarters of negative GDP growth but was not officially designated a recession by the NBER because it did not meet its strict criteria.

Image source: Getty Images.

Either way, whenever the market has been down for an extended period of time, including the first quarter of 2026, the Vanguard Consumer Staples ETF has weathered the storm.

Outperforming from the Great Recession to COVID

The Vanguard Consumer Staples ETF was not around for the dot-com recession of 2001; in fact, Vanguard only had one ETF on the market at that time, the Vanguard Total Stock Market ETF (NYSEMKT: VTI).

As the graphic below shows, the VDC beat all of the other major Vanguard ETFs during the Great Recession, falling just 19% while the S&P 500 was off nearly 36% and the Nasdaq fell 31% over that 18-month stretch.

Data by YCharts.

Then, during the short but intense COVID-19 recession, VDC also beat all of the other major Vanguard ETFs. I exclude the Vanguard S&P 500 ETF (NYSEMKT: VOO) from the chart because it tracks the major large-cap benchmark.

During the COVID-19 recession, from mid-February to mid-April 2020, the VDC was down 7%, but the S&P 500 was off 15% and the Nasdaq fell 12%. That also beat all other major Vanguard ETFs.

Data by YCharts.

And during the bear market and not-quite-recession of 2022, the Vanguard Consumer Staples ETF also beat the market. Over that stretch, generally defined as from January 2022 to mid-October 2022, VDC was down only 13%, beating the S&P 500's -25% return and the Nasdaq's -35% return.

That outperformance continued even this year, during the first quarter, when the Nasdaq dropped 7%, and the S&P 500 fell nearly 5%, the VDC was Vanguard's best performer, up about 6% in the quarter.

So, the pattern is clear -- the Vanguard Consumer Staples ETF has not only beaten the indexes during recessions and bear markets since it debuted in 2004, it has been the best one of the best-performing major Vanguard ETFs.

If you are looking to add some downside protection to your portfolio in case there is another downturn or recession, you may not find a better option than the Vanguard Consumer Staples ETF.

Dave Kovaleski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Vanguard Dividend Appreciation ETF, Vanguard Growth ETF, Vanguard High Dividend Yield ETF, Vanguard S&P 500 ETF, and Vanguard Value ETF. The Motley Fool has a disclosure policy.