If you're interested in broad exposure to the Technology - Broad segment of the equity market, look no further than the Vanguard Information Technology ETF (VGT), a passively managed exchange traded fund launched on January 26, 2004.
The Vanguard Information Technology ETF (VGT) is a cost-efficient, high-performing vehicle for diversified big-tech exposure to the American AI trade. It has an average annual 10-year return of 22.6%. VGT has outperformed the S&P 500 by 7.5% annually over 10 years, driven by heavy semiconductor and AI-leader exposure, notably NVDA - a 17.5% allocation in the portfolio. Despite a 38.6x P/E premium and missing Google, VGT's 40.7% ROE and the strong FCF profiles of its top holdings justify its valuation.
Vanguard Information Technology Index Fund ETF (VGT) rose 21% in 2025, yet valuation concerns may be overstated. Despite higher prices, VGT's P/E ratio has declined as earnings have outpaced price gains. Market narratives about tech overvaluation overlook underlying earnings growth and valuation compression.
CHAT has delivered a much stronger one-year return but at a significantly higher expense ratio than VGT VGT holds more stocks, is far larger and more liquid, and is less volatile than the concentrated, actively managed CHAT Both funds heavily feature tech giants, but CHAT's AI-specific focus create a narrower, thematic tilt These 10 Stocks Could Mint the Next Wave of Millionaires ›
If you're interested in broad exposure to the Technology - Broad segment of the equity market, look no further than the Vanguard Information Technology ETF (VGT), a passively managed exchange traded fund launched on January 26, 2004.
Both funds deliver nearly identical sector exposure and recent performance, with a minimal expense difference. Top holdings are similar, but VGT holds more stocks overall.
The Vanguard Information Technology ETF charges a much lower expense ratio and holds far more companies than the iShares Semiconductor ETF. SOXX delivered a stronger 1-year return and higher risk profile, while VGT has been less volatile with a shallower historical drawdown.
AI will likely be ubiquitous by the time today's children reach adulthood in the mid-2030s. This technology-focused fund captures the leaders in advanced compute across software, semiconductors, and IT services.
Vanguard Information Technology ETF and Technology Select Sector SPDR Fund have soared, but both are highly concentrated in a few mega-cap tech stocks. VGT and XLK face risks from high valuations, economic headwinds, and potential reversals in the AI-driven rally, making them vulnerable to significant pullbacks. I recommend investors reduce exposure to these tech ETFs and consider rebalancing portfolios, as the S&P 500 and small-cap value funds may offer better risk-reward.
Vanguard funds charge low management fees and can make for ideal long-term investments. The Vanguard Information Technology Index Fund ETF can position investors for strong gains from the tech sector.
The technology sector has delivered powerful performance in 2025, with transformative trends such as artificial intelligence driving significant market gains. For many investors, the desire to participate in this growth is strong, but the landscape presents a clear challenge.
Vanguard Information Technology Index Fund ETF Shares (VGT) earns a buy rating due to strong earnings growth and robust US economic outlook. The US stock market's uptrend is fueled by better-than-expected earnings, Fed rate cuts, and resilient GDP growth, despite trade war concerns. Technology sector momentum is driven by AI innovation, with mega caps like NVDA, MSFT, AAPL, and AVGO expected to deliver significant earnings growth.