Buy These 2 Vanguard ETFs for Long-Term Safety Amid the Market Crash

Source The Motley Fool

Through Wednesday's close, the S&P 500 was down nearly 11% in 2025, and the Nasdaq Composite has been on an even steeper fall -- crashing around 16% since January. And there may be more of a decline to come. If tariffs put a dent into corporate earnings in upcoming quarters and the economy falls into a recession, this may only be the early stage of a bigger crash.

So, what should investors do? One good strategy involves looking for safety in exchange-traded funds (ETFs), which give you exposure to dozens, hundreds, or even thousands of different stocks and can be easily bought and sold through your favorite brokerage. ETFs let you invest in an entire index, or just the stock-market sectors you want.

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A couple of Vanguard funds that investors may want to consider adding to their portfolios today are the Vanguard Utilities Index Fund ETF (NYSEMKT: VPU) and the Vanguard Consumer Staples Index Fund ETF (NYSEMKT: VDC), two ETFs that focus on sectors with particular resistance to recessionary pressures. Whether you're looking at investments to hang on to for the long term or just for some safety in the short run, here's why these can be attractive funds to load up on right now.

^SPX Chart

^SPX data by YCharts

Vanguard Utilities Index Fund ETF

The Vanguard Utilities Index Fund invests in a sector of the market that inherently makes for a safe investment. Utility companies benefit from a high degree of recurring revenue, and that makes them incredibly stable and safe investments to hang on to. While budget-conscious consumers might start saving money by cutting back on discretionary spending -- like how often they eat out at restaurants or how much they spend -- they're less likely to make drastic changes to their electricity or water use.

There are 69 stocks in the Vanguard Utilities fund, including NextEra Energy, Southern Company, and Duke Energy. Those three stocks make up around 26% of the entire portfolio. But those are fairly big players in the industry, and that high concentration shouldn't concern investors much.

The ETF has rallied a little over 2% this year amid the market downturn, and that's without even factoring in its dividend, which yields around 3%. The Utilities Index Fund charges a low expense ratio of 0.09%, ensuring that fees aren't taking out a big piece of your overall gains. This ETF is a great example of a buy-and-forget investment you can tuck away in your portfolio and hang on to for years.

Vanguard Consumer Staples Index Fund

Another sector of the economy that may be a fairly safe place to invest in right now is consumer staples. These are businesses that also provide consumers with day-to-day necessities, including groceries and household products.

The big three dominating this index are Costco Wholesale, Procter & Gamble, and Walmart -- they account for more than one-third of the fund's overall weight. Those are great examples of businesses that are going to continue to be busy and do well in myriad economic conditions. Their organic growth rates may slow down in a recession, but they should still perform reasonably well, especially when compared to other businesses that rely mainly on discretionary spending.

There are a little over 100 stocks in this ETF, and it also has a modest expense ratio of 0.09%. The fund's yield is slightly lower at 2.4%, but that's still better than the S&P 500 average of 1.5%.

Year to date, the ETF has risen by a little over 2% as investors have flocked to safe-haven investments.

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David Jagielski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale, NextEra Energy, and Walmart. The Motley Fool recommends Duke Energy. The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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