S&P 500 Sell-Off: 3 Must-Have Vanguard ETFs to Consider Now

Recently, the S&P 500 (^GSPC) fell into correction territory, decreasing by 8.73% since mid-February. As the market fluctuates, many investors are expressing concerns about a possible recession, with nearly 60% of U.S. investors feeling doubtful about the market's prospects for the next six months, based on a recent survey.

While the future is uncertain, this could present a great opportunity to acquire stocks at discounted prices. With the market effectively on sale, purchasing certain Vanguard exchange-traded funds (ETFs) may be a wise choice.

1. Vanguard S&P 500 ETF

If you are a cautious investor or prefer a more stable option, the Vanguard S&P 500 ETF (VOO) is an excellent choice. This ETF follows the S&P 500 index, meaning it includes the same stocks and aims to replicate its performance over the long term.

The S&P 500 consists of shares from 500 of the largest U.S. companies, many of which are esteemed firms that have successfully weathered economic difficulties in the past. During times of market volatility, an S&P 500 ETF is among the safer investments you can make. Historically, this index has endured many recessions, market crashes, and bear markets over the past century.

As the Vanguard S&P 500 ETF mirrors the S&P 500 index, it is also likely to withstand potential downturns. If you are feeling apprehensive about market trends, this ETF might serve as a protective element in your investment portfolio.

2. Vanguard S&P 500 Growth ETF

If you seek an S&P 500 option with more growth potential, the Vanguard S&P 500 Growth ETF (VOOG) may catch your interest. This fund focuses on S&P 500 companies that demonstrate strong growth potential.

Offering a balance between a secure investment, like the S&P 500 ETF, and a higher-risk growth ETF, it includes 209 stocks expected to grow faster than average. Since these stocks are large-cap companies in the S&P 500, this ETF carries less risk compared to many other growth-focused ETFs.

In the past decade, this ETF achieved an average annual return of 14.63%, compared to 12.93% for the Vanguard S&P 500 ETF. This difference might appear small but can translate to substantial gains over time.

3. Vanguard Information Technology ETF

The Vanguard Information Technology ETF (VGT) zeroes in on the technology sector, incorporating 314 stocks from various technology fields. This fund involves a higher degree of risk as it has less diversification than the previous two ETFs but has historically yielded significant returns.

In the last ten years, it achieved an average return of 19.76% per year. With this growth rate, a monthly investment of $200 could accumulate approximately $2.7 million over 30 years.

However, it is vital to note that the tech industry often suffers during economic downturns. Indeed, the tech-heavy Nasdaq Composite (^IXIC) has experienced a drop of over 11% since mid-February. Thus, the short-term outlook can be unstable—but over the long term, this ETF has demonstrated impressive performance.

Currently, this ETF trades around $560 per share, down from approximately $644 a month ago. If you are comfortable with higher risk in pursuit of substantial returns, now could be a strategic time to invest in the Vanguard Information Technology ETF.

Market contractions can be intimidating; however, they can also create invaluable buying chances. Regardless of your choices, maintaining a long-term perspective is critical. Aim to hold your investments for several years since, historically, the market has proven resilient in recovering from downturns.

S&P500, ETFs, Investing