Vanguard runs more than 100 exchange-traded funds (ETFs), covering everything from broad market indexes to razor-focused sector plays. With markets hitting record highs and uncertainty lurking around every corner, picking the right Vanguard fund matters more than ever.
Right now, I'm drawn to funds that balance risk with reliable returns -- not the high-flyers that dominated recent years. Give me steady income from emerging market bonds over tech stocks trading at nosebleed valuations. In this market, boring might just be beautiful.
Here's one Vanguard ETF I'd buy today for its surprising resilience and income potential, and one popular tech fund I'm avoiding despite its stellar track record.
NASDAQ: VWOB
Key Data Points
VWOB delivers surprisingly steady income
Think of Vanguard Emerging Markets Government Bond ETF (VWOB +0.15%) as the "extra espresso shot" of bond funds: it's built for income, but it can make your portfolio a little buzzier.
It holds U.S. dollar-denominated bonds from emerging-market governments and government-linked issuers, so you skip the currency roller coaster but still take on two big forces: U.S. interest rate moves and emerging market credit risk. The fund's largest holdings right now include several government bonds from Argentina, Mexico, and the Middle East.
The interest rate and emerging market combo can be a double-edged sword, like any high-risk investment asset. It usually results in higher yields than plain-vanilla U.S. bond funds, with more price swings -- especially during global risk-off moments or when Treasury yields jump.
VWOB's share price hasn't recovered from the inflation panic of 2022, for example. Then again, that's true for most bond funds, and payouts make a big difference. This inherently risky option has actually outperformed the more popular Vanguard Long-term Treasury Index Fund (VGLT +0.40%) in that period, providing consistently superior yields along the way. As of Nov. 21, 2025, VWOB posted a 3-year total return of 8.4% while VGLT fell 27% -- reinvested cash distributions and all:
VWOB Total Return Price data by YCharts
It's a sidecar in most portfolios, not the main engine. You will rarely beat the S&P 500 (^GSPC +1.32%) index with this income-oriented fund, but it's great for an income generator in a diversified portfolio. You may have to tolerate a wobbly share price from time to time and think in multi-year terms, though. VWOB is stable in comparison to most emerging-market funds, but it's by no means a safe haven.
It pays monthly cash distributions, but the payout can vary, so peek at the current SEC yield (5.7% today) and average bond duration (7.0 years) on Vanguard's fact sheet before you commit.
And don't forget the potential tax implications: ETF distributions are technically not the same thing as dividend payouts, even if they feel similar. Uncle Sam treats them as mostly ordinary income, not the lower-tax "qualified dividend" class. This effect makes VWOB a better fit for tax-advantaged account types like IRAs and 401(k) plans. Check in with your tax professional before planning your retirement payouts around the VWOB (or any other ETF).
The VWOB fund's surprising stability and top-notch yields make it an interesting pick in times of macroeconomic uncertainty. It's one of the first Vanguard ETFs I'd consider buying right now, adding some reliable income to my portfolio in these unpredictable times.
NYSEMKT: VGT
Key Data Points
VGT is a great fund for another time
I own a few shares of the Vanguard Information Technology ETF (VGT +2.37%) and have no plans to sell them. I'm also a big fan of its chosen focus on information technology (IT) stocks, and I own separate stock in many of its biggest holdings.
But I wouldn't consider buying more VGT right now. It's not the security blanket I look for when it's storming on Wall Street.
I mean, there's a time and there's a place for VGT. Among Vanguard's 10 largest ETFs by assets under management (AUM), VGT is consistently the top performer in long-term returns (3 years or more). But it's also the most volatile fund in that group with a beta value of 1.3, and the worst performer in terms of short-term returns (1 month or less).
Time in the market almost always beats market timing, but you should still try to pick the right investments to fit unusual market environments. I'm a VGT buyer when the tech sector looks undervalued and forgotten, and that's certainly not the case in 2025. Instead, the stock market as a whole is trading near historical record levels, both in terms of all-time-high index levels and lofty average price-to-earnings ratios.
Image source: Getty Images.
Richly valued tech giants like Nvidia (NVDA +1.96%), Apple (AAPL +1.28%), and Microsoft (MSFT +0.77%) play leading roles in that drama, and may be due for price corrections. These three stocks account for 45.6% of VGT's total portfolio today.
That's a heavier concentration than you'd see in broader market trackers like the Vanguard S&P 500 ETF (VOO +1.30%) -- the next two names in VGT's holdings are Broadcom (AVGO +8.97%) and Palantir Technologies (PLTR +5.31%) at just 4.5% and 2.1%, respectively. VOO's top 3 names are the same, but at a lighter 29% concentration.
So no, I'm not buying more VGT in this market. My investable dollars are more likely headed for the lower-risk environment of the VOO S&P 500 tracker or the aforementioned VWOB income generator.
