Vanguard Utilities ETF: The Best Vanguard ETF to Invest $1,000 In Right Now

The article recommends the Vanguard Utilities ETF (VPU) as the best Vanguard ETF to invest $1,000 in right now. The fund owns 69 US utility stocks, including NextEra Energy, Constellation Energy, and Southern Company. Despite not being among Vanguard's top performers, VPU has a solid year-to-date return of around 15% and a relatively low valuation. The author suggests that international ETFs and high-performing funds with high valuations may be risky investments in the current market.

In the dynamic landscape of exchange-traded funds (ETFs), selecting the right investment can be challenging. Given the current market conditions and the plethora of options available, investors are often left to navigate a complex web of choices. One standout ETF from Vanguard that has gained attention for its performance and potential is the Vanguard Utilities ETF (VPU).

The Vanguard Utilities ETF, with its ticker symbol VPU, is designed to track the performance of the U.S. utility sector. It currently holds 69 U.S. utility stocks, including notable companies like NextEra Energy, Constellation Energy, and Southern Company. Despite not being among the top performers in 2025, the Vanguard Utilities ETF has demonstrated a solid year-to-date return of around 15%, placing it in the 12th position among all Vanguard ETFs based on year-to-date performance [1].

One of the key attractions of the Vanguard Utilities ETF is its relatively low valuation. The fund's price-to-earnings (P/E) ratio is 21.4, which is significantly lower than the S&P 500's earnings multiple of 27.6. Additionally, the forward P/E ratio for the S&P 500 utility sector is 19, further indicating that the fund's valuation is not overly stretched [1].

Investors may be drawn to the Vanguard Utilities ETF as a safe haven during times of market volatility. Utility stocks are often viewed as stable and less sensitive to economic downturns, making them an attractive option when the broader market is uncertain. Furthermore, many of the stocks held in the ETF have strong growth prospects, particularly in areas such as artificial intelligence (AI) and data centers, which require substantial amounts of power [1].

However, it is essential to consider the potential risks associated with the Vanguard Utilities ETF. While the fund has shown resilience and may hold up better than many equity ETFs during an economic downturn, it is not immune to market fluctuations. If the economy weakens significantly, the ETF could still experience declines. Additionally, while the utility sector may offer a hedge against market volatility, it may not provide the same level of growth as other sectors during periods of economic expansion [1].

In conclusion, the Vanguard Utilities ETF (VPU) presents a compelling option for investors looking to invest $1,000 in 2025. With a solid year-to-date return, a relatively low valuation, and a portfolio of stable utility stocks, the ETF offers a balanced approach to investing in the current market conditions. However, as with any investment, it is crucial to conduct thorough research and consider the potential risks before making a decision.

References:
[1] https://finance.yahoo.com/news/best-vanguard-etf-invest-1-084400846.html
[2] https://www.fool.com/investing/2025/08/18/vanguard-etfs-to-buy-with-2000-and-hold-forever/