Millions of investors rely on exchange-traded funds for their portfolios. By taking advantage of easy tradability and instant diversification, ETFs have attracted trillions of dollars in assets, and fund giant Vanguard Group has pulled in more than its fair share of ETF money for its proprietary funds.

So far, most markets are up in 2018, and that's lifted many ETFs in the Vanguard family. But a few funds have seen extraordinary performance. Among the best so far this year are Vanguard Information Technology (NYSEMKT:VGT), Vanguard Small-Cap Growth (NYSEMKT:VBK), and Vanguard Consumer Discretionary (NYSEMKT:VCR), and below, we'll take a closer look at how they've achieved their dominance in 2018.

The best Vanguard ETFs so far in 2018

ETF

Year-to-Date Return

Vanguard Information Technology

22.16%

Vanguard Small-Cap Growth

17.77%

Vanguard Consumer Discretionary

16.69%

Data source: Vanguard Group. As of Sept. 11.

Another great year for tech

Technology stocks have been on an amazing run, and Vanguard Information Technology has been an investor favorite for years. The fund has nearly 400 stocks in its portfolio, with holdings that range across the industry to include not only the long-term stalwarts of the space but also the newest players in cutting-edge technologies like cloud computing, mobile connectivity, and artificial intelligence.

Even though ETFs are designed to be diversified, one thing that stands out with Vanguard Information Technology is that just two companies -- Apple and Microsoft -- make up almost 30% of the fund's total assets. Both have delivered solid performance so far this year, with year-to-date returns of 34% and 31%, respectively. Yet some would argue that excessive exposure to these two giants of the industry makes the ETF less useful for those looking to take advantage of the success of smaller up-and-coming players in the space.

Vanguard logo with ship and company name.

Image source: Vanguard.

Finding success in small-cap stocks

Interestingly, one answer to tech investors' worries about overinvesting in top industry names could be to focus more on ETFs that concentrate on small-cap stocks. Vanguard Small-Cap Growth has substantial exposure to technology stocks, with almost a quarter of its assets invested in the sector. Healthcare, industrial, and consumer stocks also play key roles in the fund's holdings, but looking at the ETF's individual stocks, you can find four tech stocks out of the top eight positions, and all of them have enjoyed returns of roughly 70% or more.

Favorable conditions in the U.S. economy are more beneficial for small-cap stocks than their larger counterparts because most small companies have more local exposure. Large multinationals tend to have exposure beyond the U.S., and fears of trade tensions have held back many of those companies. Small-cap diversification is a good idea for any investor in stocks, and the Vanguard Small-Cap Growth ETF is a reasonable way to get it.

The Amazon effect

It's rare for a single stock to define the entire performance of an exchange-traded fund, but for Vanguard Consumer Discretionary, there's a simple answer. Amazon.com has seen a 70% rise so far in 2018, and with a 23% allocation to the e-commerce giant in the Vanguard ETF, you can attribute nearly the entire 17% rise in the value of the fund year to date to Amazon's gains.

To be fair, there are roughly 370 other stocks in the portfolio, with certain subsectors of the discretionary space playing tug-of-war with others in an attempt to produce overall gains. Strength in areas like home improvement and big-box retail has been offset by weakness among automakers and casino stocks. As long as Vanguard's ETFs use a cap-weighted allocation system, though, Amazon will have a commanding role in the future performance of Vanguard Consumer Discretionary.

See what the rest of 2018 holds

The list of Vanguard's best ETFs so far in 2018 gives investors a good idea of what's working well this year. Barring an unexpected transformation in the markets, the trends that have lifted these three ETFs appear to be well-entrenched to continue for the foreseeable future.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Teresa Kersten is an employee of LinkedIn and is a member of The Motley Fool's board of directors. LinkedIn is owned by Microsoft. Dan Caplinger owns shares of Apple and Vanguard Information Technology ETF. The Motley Fool owns shares of and recommends Amazon and Apple. The Motley Fool has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool has a disclosure policy.