Contrarian Take: Vanguard's 3 Worst-Performing Equity ETFs in 2026 Are All Buys in March

What a quality a calendar twelvemonth tin make. Exchange-traded funds (ETFs) with outsize vulnerability to maturation stocks crushed the S&P 500 over the past fewer years. But truthful acold this year, it's the sectors with dense assets -- specified arsenic vigor and materials -- that are producing the champion gains.

Mutual money elephantine Vanguard offers 65 low-cost equity-focused ETFs. The 3 worst-performing twelvemonth to day are the Vanguard Mega Cap Growth ETF (NYSEMKT: MGK), the Vanguard Growth ETF (NYSEMKT: VUG), and the Vanguard Financials ETF (NYSEMKT: VFH).

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Here's wherefore each 3 ETFs are falling, and wherefore they are fantabulous buys successful March.

When banal prices outpace net growth, valuations tin go inflated, opening the doorway to a sell-off.

Nvidia is an fantabulous illustration of this dynamic. The banal terms is unchanged from 7 months ago, but Nvidia has substantially grown income and net implicit that play -- including 20% quarter-over-quarter gross maturation successful the 4th reported Feb. 25. Nvidia's net are outpacing its banal price, which has led to its valuation to autumn by truthful overmuch that it is present cheaper than the S&P 500 based connected guardant earnings.

But Wall Street cares much astir wherever a banal could beryllium headed than astir past results. And immoderate investors fearfulness that companies are spending excessively overmuch connected artificial quality (AI) and that these investments volition instrumentality clip to wage disconnected oregon volition autumn abbreviated of expectations.

The Vanguard Mega Cap Growth ETF has been 1 of the astir effectual ETFs for investing successful starring AI, unreality computing, and hyperscaler stocks. It's fundamentally a stake that the largest tech-focused companies volition proceed to outperform the S&P 500, which is precisely what has happened implicit the agelong term.

By concentrating truthful overmuch connected a fistful of stocks -- including Nvidia, Apple, Alphabet, Microsoft, Amazon, Meta Platforms, Tesla, Broadcom, Eli Lilly -- the money has doubled successful conscionable 3 years and is up 421.9% successful the past decennary compared to a 305.7% summation for the S&P 500. But successful 2026, it is Vanguard's worst-performing equity ETF.

A precise akin fund, the Vanguard Growth ETF, is doing lone somewhat better. It's fundamentally a little concentrated mentation of its Mega Cap cousin, with astir treble the holdings. But it's inactive heavy babelike connected the show of its largest holdings, with 66.2% of its weighting successful the 10 largest.