It's no secret that technology companies have been the primary driver of the stock market's excellent returns over the past decade or so. And not only has tech led the market higher, but the massive surge in artificial intelligence (AI) investment is accelerating as we head into 2026, so there's reason to believe that tech could still be a great place to invest.
However, choosing individual technology stocks to buy isn't the best move for everyone, and there are hundreds of excellent exchange-traded funds, or ETFs, that you can use to get technology exposure.
With that in mind, if I were to invest $1,000 in a technology ETF right now, it wouldn't be in a specialized ETF, like one that focuses on AI or robotics, but I would choose a tech index fund with broad exposure. I'm a big fan of Vanguard ETFs, and there are some that offer excellent technology exposure at a minimal expense. However, the most obvious choice might not be the best approach.
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The obvious play might not be the best
The most obvious broad-based tech sector ETF in Vanguard's lineup is the Vanguard Information Technology ETF (VGT 1.96%). Like most Vanguard ETFs, it has a rock-bottom 0.09% expense ratio and aims to match the performance of a technology sector benchmark index.
To be clear, there's absolutely nothing wrong with investing in this ETF, and if you're looking for a pure play on technology, it's a great option from Vanguard. However, my biggest issue with this ETF is that it doesn't include many of the companies that investors often associate with the term "technology stocks."
For example, you won't find exposure to Google parent Alphabet or to Amazon, which technically belong to the communications and consumer discretionary sectors, respectively.
The Vanguard Growth ETF
Because of this, if I were to invest $1,000 into a Vanguard ETF today with the goal of "investing in technology," my choice would be the Vanguard Growth ETF (VUG 1.77%).
NYSEMKT: VUG
Key Data Points
The Vanguard Growth ETF tracks an index of large-cap stocks that have growth characteristics. And as you might expect, tech stocks make up the bulk of the portfolio. You'll find most of the same top holdings as the information technology ETF, but you'll also find exposure to the other megacap AI stocks like the two mentioned earlier, as well as to other exciting non-tech sector growth companies like Tesla and Eli Lilly.
In all, the Vanguard Growth ETF owns 160 stocks. The average company in the portfolio is growing earnings at an impressive rate of 31% annually and trades for approximately 39 times earnings, which is quite reasonable given the high rate of earnings growth. And if it helps, the Vanguard Growth ETF has an even lower (0.04%) expense ratio than the information technology ETF.
To be sure, there are some drawbacks to the Vanguard Growth ETF that you should be aware of. Most significantly, it's rather top-heavy, with its top three holdings accounting for 32% of the assets and the top 10 holdings making up more than 60%. In a nutshell, if a company like Apple or Nvidia performs poorly, this fund is likely to take a hit.
To sum up, the Vanguard Growth ETF should be an excellent investment to hold in 2026 and for many years to come. Whatever the key technology trends are at any given time should be well represented in this low-cost ETF, and if you're looking to deploy $1,000 (or any other amount) into tech stocks this year, it deserves a spot on your watch list.
