Tech exchange-traded funds (ETFs) are a good way to get broad exposure to the tech sector. The Vanguard Information Technology ETF (VGT 1.96%) is the largest by assets under management (AUM), as of Jan. 9, and it has performed extremely well over the last decade.
Just how well has it done? To find out, we can look at how much a reasonable investment in this Vanguard ETF would've returned.
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Here's how much $10,000 in this Vanguard ETF would've grown
If you'd put $10,000 into the Vanguard Information Technology ETF 10 years ago, you'd now have $83,310. For perspective, the same amount invested in the S&P 500 index would've turned into $43,090. This Vanguard tech ETF has more than doubled the market's return, as measured by the S&P 500.
The primary reason for those market-beating returns is this ETF's tech focus. The tech sector has significantly outperformed the broader market over the last decade, particularly in recent years with the rise of artificial intelligence (AI). The Vanguard Information Technology ETF currently invests in 322 tech companies, with Nvidia, Microsoft, Broadcom, and Palantir Technologies being among its largest holdings.
NYSEMKT: VGT
Key Data Points
Low fees are the other key ingredient in this ETF's success. Vanguard is known for charging rock-bottom fees, and that's the case here, as this ETF has an expense ratio of just 0.09%. For every $10,000 you invest, you pay just $9 in annual fees.
The downside to the tech sector is that it's also more volatile than the broader market. Bear markets will often cause steeper drops in tech-heavy portfolios. If you're willing to ride out volatility, and you'd like to add hundreds of tech stocks to your portfolio in a single investment, the Vanguard Information Technology ETF is worth a look.
