From Nasdaq: 2024-05-30 07:30:00

Vanguard Information Technology Index Fund ETF (VGT) has outperformed the S&P 500, rising 35% in the past year and boasting wider gains over three, five, and 10 years. The fund tracks a diversified list of tech stocks, with top holdings including Microsoft, Apple, and Nvidia. While it offers tech exposure, it comes with notable volatility and risk. Investors should consider using it as a part of a diversified portfolio rather than as a sole investment.

The fund follows the MSCI US Investable Market Information Technology 25/50 Index, which limits exposure to any single holding. Microsoft, Apple, and Nvidia make up nearly 45% of the portfolio. With a low expense ratio of 0.1% and a dividend yield around 0.7%, the fund offers exposure to a variety of tech sectors, with semiconductors making up the largest portion of assets.

While investing in Vanguard Information Technology Index Fund ETF could lead to significant long-term gains, investors should be prepared for volatility. The fund has a beta of 1.2 compared to the broader market, indicating higher volatility. With a heavy concentration in three top holdings, price swings can be significant. Consider using the fund to complement a diversified portfolio rather than relying on it as a primary investment.

Investing in Vanguard Information Technology Index Fund ETF should be part of a larger, diversified portfolio strategy. While it may offer the potential for significant gains and help build wealth over time, it also comes with higher volatility and risk. Consider the fund’s performance history, sector exposure, and concentration in top holdings before allocating funds. Use it as part of a diversified investment approach to manage risk and enhance overall portfolio returns.



Read more at Nasdaq: Is Vanguard Information Technology Index Fund ETF a Millionaire Maker?