The Best Vanguard ETF to Invest $1,000 in Right Now

This year is still in its early innings, but some clear trends are already emerging, and investors may do well to heed those signals. Those include leadership by smaller stocks and value names.

With the Russell 2000 index up 7.59% year to date, small-cap stocks are generating plenty of buzz as value equities perform well across a variety of market capitalization spectrums. Just look at the Russell 1000 Value index, which is higher by 6.77% since the start of the year.

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As is par for the course, mid-cap stocks are getting lost in the shuffle, but that doesn't diminish the allure of the Vanguard Mid-Cap Value ETF (NYSEMKT: VOE) as perhaps the best of that issuer's exchange-traded funds (ETFs) to allocate $1,000 to right now. Sure, performance bolsters the case for this ETF. It's beating large-cap value gauges while trouncing the Vanguard Mid-Cap ETF (NYSEMKT: VO), its blend counterpart. That scenario could extend into this year.

This Vanguard ETF is just getting started

While this Vanguard ETF merits closer examination today, that urgency doesn't diminish its relevance to investors considering it as a possible addition to a buy-and-hold strategy. Actually, that's where this fund can truly shine. Here's why.

Overlooked as they are, mid-cap stocks have a history of outpacing their larger and smaller counterparts over extended periods, while often being less volatile than small-cap names. Said another way, this Vanguard ETF may offer investors long-term returns comparable to or exceeding those of similar small-cap funds while subjecting them to shallower drawdowns.

Speaking of mitigating risk, this ETF has its own buffers in place to potentially smooth out the mid-cap ride. Notably, the median market value of its 179 holdings is $40.1 billion, or quadruple the $10 billion that defines the highest end of mid-cap territory. That is to say, this ETF holds some smaller large-cap stocks.

Explaining why that's the case is easy. This Vanguard index fund tracks the CRSP US Mid Cap Index, which filters out the top 70% and the bottom 15% of domestic stocks by market capitalization. So some of the remaining 15% that make up the gauge's selection universe are smaller large caps, and that's all right because it provides this ETF with a potentially more stable, less volatile portfolio than competing mid-cap funds.

V is value and just maybe, victory

Some, if not much of the near-term allure with this ETF is its status as a value fund. The Vanguard fund lives up to its value billing, as nearly 34% of its lineup is composed of financial services and industrial stocks. Combine that trait with its status as a mid-cap fund, and this ETF becomes more attractive at a time when investors are fretting about issues like artificial intelligence (AI) spending.

Speaking of the perks, arguably long overlooked, of mid-cap value, that combination was the best performer among the nine Russell style boxes for the 25 years ending April 2025. Plus, this Vanguard ETF has a low cost of admission with an annual expense ratio of just 0.05%, or $5 on a $10,000 stake. That's far below the category average of 0.95%.

Todd Shriber has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Vanguard Mid-Cap ETF. The Motley Fool has a disclosure policy.