3 Vanguard ETFs to Consider Building Exposure Ahead of a Potential 2026 Recession

As concerns grow over a potential economic contraction by 2026, investors are turning to low-cost, broadly diversified exchange-traded funds to hedge against market volatility. Among the most attractive options are three Vanguard ETFs: VOO (Vanguard S&P 500 ETF), VTI (Vanguard Total Stock Market ETF), and VEA (Vanguard FTSE All-World ex-U.S. ETF). These funds provide exposure across large-cap U.S. equities, domestic market breadth, and global developed markets, respectively. Each ETF carries an expense ratio below 0.10%, making them cost-efficient tools for long-term portfolio construction. VOO tracks the S&P 500 and holds over 500 stocks, with a $78 billion net asset value as of late 2025. VTI encompasses nearly 4,000 U.S. stocks across all market caps and has surpassed $1.9 trillion in assets under management. VEA offers access to over 3,500 non-U.S. equities in developed markets, with $286 billion in AUM and exposure to regions including Europe, Japan, and Australia. The appeal lies in their defensive attributes amid rising expectations of reduced corporate earnings, elevated inflationary pressures, and tighter monetary policy. Historical data shows that broad-market indices tend to recover faster post-recession than sector-specific or small-cap funds. With average annual returns of 7–10% over the past decade, these ETFs serve as core holdings in resilient portfolios. Market participants, including institutional investors and retirement account managers, have already increased allocations to these funds. The growing demand is reflected in trading volumes and inflows, particularly in VTI and VEA, which saw net inflows exceeding $15 billion combined in Q4 2025. As recession fears intensify, these ETFs remain top choices for risk mitigation without sacrificing growth potential.