Why VBR is the Top Vanguard ETF Pick Right Now

My hands-down favorite Vanguard ETF right now

If you asked Warren Buffett what his favorite Vanguard ETF is, he'd probably tell you he likes the Vanguard S&P 500 ETF. His Berkshire Hathaway portfolio owns this ETF. Buffett's will also stipulates the cash his family inherits be invested in a low-cost S&P 500 index fund. The legendary investor recommended Vanguard's.

I agree that VOO is a solid choice for investors. But my hands-down favorite Vanguard ETF right now is instead the Vanguard Small-Cap Value Index Fund ETF (NYSEMKT: VBR).

Why VBR is a standout choice

• VBR focuses on small-cap value stocks
• It holds 856 U.S. stocks across 11 sectors
• No stock makes up more than 0.78% of the fund

Reasons for choosing VBR

1. Historical outperformance of small-cap value stocks: VBR is poised for success based on historical returns
2. Market inefficiency: Analysts' lack of coverage can create opportunities for investors
3. Price-to-earnings gap: VBR is trading below average with favorable valuations compared to large-caps
4. Interest rate sensitivity: Potential rate cuts signal positive catalysts for VBR
5. Low expenses and dividend yield: VBR boasts a low expense ratio of 0.07% and a 1.99% dividend yield

One potential concern: Market volatility due to geopolitical issues may impact near-term performance.