The Ultimate Vanguard ETF to Drop $1,000 Into Today - August 2025 Edition

Wall Street's sleeping giant just woke up—and it's hungry for your portfolio.

Vanguard's flagship ETF isn't just beating the market; it's rewriting the rulebook on passive investing while traditional finance scrambles to keep up.

The $1,000 Power Play

Forget stock-picking stress and fund manager fees that bleed returns dry. This ETF bundles America's corporate titans into a single trade—zero stock-specific risk, maximum market exposure. One click buys you fractional shares in 500 companies without the brokerage circus.

Why This Isn't Your Grandpa's Index Fund

Algorithmic rebalancing executes trades at nanosecond speeds humans can't match. Tax-loss harvesting happens automatically behind the scenes—no accountant required. Expense ratios sit at near-zero levels that'd give active managers night sweats.

The Cynical Truth Wall Street Hates

While hedge funds charge 2% for underwhelming returns, this ETF delivers 99% of Warren Buffett's recommended strategy for 0.03%—the math isn't just compelling, it's embarrassing for the suits.

Deploy that capital now or watch from the sidelines as compound interest does the heavy lifting. Your future self will either thank you or wonder why you overthought free money.

Image source: Getty Images.

Crossing contenders off the list

Before we get to what I view as the best Vanguard ETF to buy, let's first cross a few worthy contenders off the list. I'll start with the top 10 best-performing Vanguard ETFs so far this year. All are international funds, with theandat the top of the list.

Am I bearish on Vanguard's international ETFs? Not at all. However, I question how much more room they have to run after many of these funds have racked up year-to-date gains of over 20%.

I think we can also eliminate Vanguard's best-performing ETFs since inception, too. This list includes the, the, and the always popular.

To be sure, these ETFs remain great long-term picks. But if you're interested in the best Vanguard ETF to invest $1,000 in right now, they share a common issue: sky-high valuations. As a case in point, the Vanguard S&P 500 ETF's price-to-earnings (P/E) ratio is 27.6. The historical average P/E ratio for the fund's underlying index, theis 16.1. Even if we look only at the past 10 years, the average earnings multiple is still well below the current level.

The risk of a near-term major stock market downturn is concerning, in my opinion. The most recent U.S. jobs numbers were weak. The full impact of higher tariffs has yet to be felt by American consumers and companies, but many economists predict it's only a matter of time before that changes. Buying Vanguard ETFs with steep valuations right now doesn't seem to be the smartest move.

The best Vanguard ETF to buy now

What is the best Vanguard ETF to buy now? My vote goes to the(VPU 0.96%). This fund owns 69 U.S. utility stocks. Its top holdings include,,,, and.

Although the Vanguard Utilities ETF isn't among Vanguard's top 10 best performers in 2025, it has nonetheless been a solid winner. The fund is up around 15% this year, good enough to land it a No. 12 spot among all Vanguard ETFs based on year-to-date performance.

Despite the nice returns, the Vanguard Utilities ETF's valuation isn't all that worrisome. Its P/E ratio is 21.4 is well below the S&P 500's earnings multiple. Moreover, the forward price-to-earnings ratio of the S&P 500 utility sector, which includes most of the ETF's holdings, is 19 -- even less concerning.

If the stock market continues chugging away, I expect the Vanguard Utilities ETF will rise in tandem. Many of the stocks in the ETF's holdings have solid growth prospects boosted by increasing demand for artificial intelligence (AI). The data centers that host AI systems require massive amounts of power.

But what if the stock market sinks as tariffs hurt the economy? Investors often flock to utility stocks during such downturns because the stocks are viewed as SAFE havens. Most utilities also have relatively low exposure to the negative effects of tariffs.

A happy medium

Granted, the Vanguard Utilities ETF could decline if the economy sours too much. However, I suspect it WOULD hold up better than many equity ETFs offered by Vanguard. Also, if the economy strengthens, other Vanguard ETFs would likely deliver greater returns. Still, I view this ETF as a sort of a "happy medium" that should appeal to many investors.