With market volatility still a concern in 2026, many investors are turning to low-risk, diversified ETFs to protect their portfolios. Using TipRanks’ Best Vanguard ETFs tool, three relatively safer options stand out: Vanguard Mortgage-Backed Securities ETF (VMBS), Vanguard Total Treasury ETF (VTG), and Vanguard Consumer Staples ETF (VDC). These ETFs focus on more stable assets and may appeal to investors seeking safer places to invest during uncertain market conditions.
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Let’s take a closer look at these Vanguard ETFs.
Vanguard Mortgage-Backed Securities ETF (VMBS)
The Vanguard Mortgage-Backed Securities ETF (VMBS) invests in U.S. government-backed mortgage bonds, primarily those issued or guaranteed by government-sponsored agencies. VMBS invests in a diversified pool of mortgage-backed securities and aims to track the performance of the Bloomberg U.S. MBS Float Adjusted Index.
VMBS has an extremely low beta of around 0.02, meaning it has very little correlation with the broader stock market. In simple terms, the ETF tends to move far less than stocks, making it a useful option for investors looking to lower portfolio volatility during uncertain markets.
The ETF also comes with a very low expense ratio of about 0.03% and currently offers a dividend yield of around 4.2%.
Vanguard Total Treasury ETF (VTG)
The Vanguard Total Treasury ETF gives investors exposure to U.S. government bonds through a mix of Treasury bills, notes, and bonds across different maturities. Because these securities are backed by the U.S. government, VTG is considered a relatively safe investment. The ETF tracks the Bloomberg U.S. Treasury Index, offering broad exposure to the Treasury market in a single fund.
VTG has a very low beta of 0.04, meaning it tends to show little volatility compared to the broader stock market. Its stability makes it an attractive option for conservative investors focused on preserving capital during uncertain market conditions.
The ETF also offers a dividend yield of around 2.94% and has a low expense ratio of 0.03%.
Vanguard Consumer Staples ETF (VDC)
The Vanguard Consumer Staples ETF invests in companies that sell everyday essentials such as food, beverages, and household products. These businesses usually remain stable because consumers continue buying these products even during economic downturns. That makes VDC a more defensive ETF with lower volatility than growth-focused sectors like technology. However, its growth potential is generally more moderate since consumer staples companies tend to grow at a steadier pace. VDC has a dividend yield of 2.06%.
VDC has a beta of 0.29, meaning it is much less volatile than the broader market and typically experiences smaller swings during market turbulence. The ETF also has a slightly higher expense ratio than the other two funds at 0.09%.