Stock market volatility can be disconcerting, especially for newer investors. However, volatility is the short-term price you pay to reap gains over the long run.
One way to reduce volatility to some extent is to invest in exchange-traded funds (ETFs) that own a broad basket of stocks. Even ETFs can decline sharply during market sell-offs, though. The good news is that the pullbacks can present excellent buying opportunities.
These three Vanguard ETFs have plunged over 10% in 2025. But they’re still magnificent picks for long-term investors.
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1. Vanguard Small-Cap ETF
As of this writing, shares of the Vanguard Small-Cap ETF (VB 2.22%) have plummeted roughly 15% below the peak earlier in 2025. This decline is an improvement from an even steeper plunge in the first week of April following President Donald Trump’s announcement of reciprocal tariffs on most countries.
The Vanguard Small-Cap ETF owns 1,357 small-cap stocks. These smaller stocks are often more volatile than large-cap stocks. And they can be hit especially hard during economic downturns. Increasing fears that the U.S. economy could slip into recession have weighed heavily on this Vanguard ETF.
However, the Vanguard Small-Cap ETF has at least one great thing going for it: a relatively low valuation. The average trailing-12-month price-to-earnings ratio for the stocks in its portfolio is 18.6, well below the earnings multiple of nearly 24.5 for the S&P 500.
Perhaps more compelling, though, is that small-cap stocks have historically outperformed large-cap stocks over the long term. That hasn’t been the case in recent years, but don’t be surprised if small-cap stocks come back sooner or later with a vengeance. If and when that happens, the Vanguard Small-Cap ETF could make patient investors a lot of money.
2. Vanguard Russell 1000 Growth ETF
The Vanguard Russell 1000 Growth ETF (VONG 1.43%) has tumbled 13% below its high set earlier in 2025. At one point last month, the ETF was down more than 23% but subsequently rebounded.
This Vanguard ETF attempts to track the Russell 1000 Growth Index. The index includes growth stocks in the Russell 1000, which is made up of the top 1,000 U.S. companies based on market cap. The Vanguard Russell 1000 Growth ETF owns 394 stocks, with top holdings including Apple, Microsoft, Nvidia, Amazon, and Meta Platforms. These five stocks alone comprise roughly 42.5% of the ETF’s portfolio.
When the stocks of these and other giant companies falter, the Vanguard Russell 1000 Growth ETF does, too. The good news, though, is that artificial intelligence (AI) is likely to provide a huge tailwind for Apple, Microsoft, Nvidia, Amazon, Meta, and other major stocks owned by this Vanguard ETF for a long time to come.
It shouldn’t be surprising that the Vanguard Russell 1000 Growth ETF ranks as Vanguard’s top-performing ETF over the long run. Since its inception in 2010, this ETF has delivered an average annual return of around 15.8%. While there’s no guarantee it can keep that level of returns coming, I expect the Vanguard Russell 1000 Growth ETF will continue its winning ways over the next decade and beyond.
3. Vanguard Mega Cap Growth ETF
Shares of the Vanguard Mega Cap Growth ETF (MGK 1.39%) are down close to 13% below the previous peak. The performance of this Vanguard ETF almost exactly mirrors that of the Vanguard Russell 1000 Growth ETF.
There’s a simple explanation for the similarity between these two ETFs. Their portfolios look a lot alike. The Vanguard Mega Cap Growth ETF’s top five holdings are the same as the Vanguard Russell 1000 Growth ETF’s. The main difference between the two funds is that the Vanguard Mega Cap Growth ETF owns only 69 stocks with a median market cap of $1.5 trillion.
Rising adoption of AI should benefit many of this Vanguard ETF’s stocks over the long run. The fund has been a big winner since its inception in 2007, delivering an average annual return of roughly 12.5%. I predict investors who buy and hold this Vanguard fund will be glad they did 10 years from now.
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Keith Speights has positions in Amazon, Apple, Meta Platforms, and Microsoft. The Motley Fool has positions in and recommends Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Vanguard Index Funds-Vanguard Small-Cap ETF. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.