Got $500? Vanguard Consumer Staples ETF Could Be the Smartest Buy Today

By Reuben Gregg Brewer – Dec 15, 2025 at 4:59PM ESTKey PointsConsumers are shifting downward as they seek bargains, opting for retailers that offer the best deals.Consumer staples aren't optional items; they are necessities that are bought in both good and bad economies.Vanguard Consumer Staples ETF is composed of industry-leading companies that are likely to withstand a recession well.These 10 Stocks Could Mint the Next Wave of Millionaires ›NYSEMKT: VDCVanguard World Fund - Vanguard Consumer Staples ETFMarket Cap$0.0KToday's Changeangle-down(0.21%) $0.46Current Price$216.74Price as of December 15, 2025 at 4:00 PM ETConsumers are concerned about rising costs, but they won't stop purchasing their necessities.The economy is in a peculiar state right now, with consumers increasingly shopping at stores known for offering low prices. It's why Walmart (WMT +0.08%) and its everyday low-price model is doing better than Target (TGT +0.48%) and its more upscale approach. If you are looking to invest some cash today, even if it's just $500, it might be smart to take a more conservative approach.

Vanguard Consumer Staples ETF (VDC +0.21%) is a convenient and cost-effective way to invest in a diversified portfolio of companies that sell essential goods and services. Here's what you need to know. What does Vanguard Consumer Staples ETF do? As its name implies, Vanguard Consumer Staples ETF invests in companies that operate in the consumer staples sector. The use of Walmart as an example above was purposeful, since that retailer is the No. 1 holding in the exchange-traded fund (ETF). Rounding out the top five are Costco (COST 2.70%), Procter & Gamble (PG +1.60%), Coca-Cola (KO +0.65%), and PepsiCo (PEP +0.38%). All are giants in the consumer staples sector. Image source: Getty Images. Interestingly, four of the five are also Dividend Kings, having increased their dividends for at least 50 consecutive years. And the one that isn't, Costco, has raised its dividend annually for over two decades. This is important because it highlights how reliable consumer staples businesses tend to be (more on this below). Technically, Vanguard Consumer Staples ETF tracks the MSCI US Investable Market Consumer Staples 25/50 Index. That sounds fancy, but it really isn't. The "25/50" in the name is about diversification. No more than 25% of assets in one stock, and stocks worth 5% of assets can't make up more than 50% of the ETF's total assets. So, by design, it is a diversified way to invest in consumer staples stocks. There are over 100 holdings in the ETF spread across 11 different consumer staples sub-sectors.Advertisement While no investment can completely protect you from a deep bear market, Vanguard Consumer Staples ETF has a history of outperforming during difficult market periods. The very modest 0.09% expense ratio, meanwhile, makes it a low-cost way to add a little safety to your portfolio. That could be a smart move with the S&P 500 index (^GSPC 0.16%) still trading near all-time highs and heavily focused on a small number of technology giants. What's so special about consumer staples stocks? There's nothing particularly special about Vanguard Consumer Staples ETF, though it does have very low costs. What's special is the sector in which it invests. That's why a $500 investment, which will net you approximately two shares, is particularly attractive today. Consumer staples companies produce and sell essential items that typically have modest costs associated with them relative to their benefits. Think food, beverages, toiletries, and over-the-counter healthcare products. You aren't about to stop buying toothpaste or deodorant because the stock market is in a tailspin. Even a deep recession wouldn't stop you from buying food. ExpandNYSEMKT: VDCVanguard World Fund - Vanguard Consumer Staples ETFToday's Change(0.21%) $0.46Current Price$216.74Key Data PointsDay's Range$215.84 - $217.5452wk Range$202.96 - $226.73Volume119K The companies here also tend to have very loyal customers, with the Coke versus Pepsi dichotomy a great example of this dynamic. Sure, you could buy the store brand cola, but if you prefer the name brand, it is an affordable luxury that you're likely to stick with, even during tough times. You could try to cherry-pick consumer staples companies, but that would require a lot of legwork. It would also likely mean focusing all of your cash on just a small number of companies, which wouldn't provide you with the diversification that is built into Vanguard Consumer Staples ETF's portfolio. Thus, a smart move if you want to quickly add this defensive sector to your portfolio is to go with an ETF like Vanguard Consumer Staples ETF. Don't bet the house; a little can go a long way What you shouldn't do is sell everything you own and invest it all into Vanguard Consumer Staples ETF. It is only a smart move to buy this ETF if you are using it as a way to add some safety to the mix, a relief valve in case there's a recession. If that's how you view the ETF, it could make a fine addition to your portfolio, whether you're investing $500 or $5,000.About the AuthorReuben Gregg Brewer is a contributing Motley Fool stock market analyst covering energy, utilities, REITs, and consumer staples. He is the former director of research at Value Line Publishing, where he rose from mutual fund analyst to equity analyst before leading all research operations. Reuben holds a bachelor’s degree in psychology from SUNY Purchase, a master’s in social work from Columbia University, and an MBA from Regis University. He has been featured as a financial expert on CNBC and in the Financial Times, Barron’s, and InvestmentNews.TMFReubenGBrewerRead NextDec 1, 2025 •By Katie BrockmanIs VDC or IYK the Stronger Consumer Staples ETF? Here's What Investors Need to Know.Dec 1, 2025 •By Josh Kohn-LindquistWhich Consumer Staples ETF Reigns Supreme: VDC or FSTA?Nov 12, 2025 •By Howard SmithVDC vs. FSTA: Vanguard ETF Tops Fidelity on Size and DurationApr 19, 2025 •By Keith Speights3 Vanguard ETFs to Buy With $500Jan 9, 2025 •By Daniel FoelberCan the 5 Worst-Performing Stock Market Sectors in 2024 Beat the S&P 500 in 2025?Nov 24, 2024 •By Keith SpeightsThese Vanguard ETFs Could Be Smart Picks If Trump Gets His Way on Tariffs