Vanguard S&P Small-Cap 600 Value Index Fund Price & Performance (VIOV)

The Vanguard Consumer Discretionary ETF has dropped 18.3% this year, with Amazon and Tesla—its top holdings—down over 21% and 41% respectively. Broader declines in travel, apparel, and restaurant stocks have compounded losses, making consumer discretionary the worst-performing sector year to date, just behind technology.12

Small-cap ETFs like Vanguard’s VIOV and VIOO are sharply negative in 2025, with VIOV down 15.86% and VIOO off 13.02% year-to-date. The high correlation between these funds underscores the risk of limited diversification among small-cap index strategies during market downturns.34

Despite recent underperformance, small-cap ETFs are attracting renewed interest due to historically low valuations. Market observers note that while small-caps lagged large-caps, the potential for a rebound is drawing attention, especially given the sector’s tendency for cyclical recoveries after sharp declines.56