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From NASDAQ: 2024-12-25 04:29:00
The top eight American technology stocks with valuations of $1 trillion or more have seen an average return of 67% in 2024, outperforming the S&P 500’s 26%. These tech giants hold a significant 35.9% weighting in the S&P 500, making them crucial for investors aiming to match or beat the index in the future.
Investing in an ETF like the Vanguard Mega Cap Growth ETF (MGK) provides exposure to these trillion-dollar tech leaders, with three of them accounting for over one-third of the portfolio. This ETF, holding just 71 stocks, focuses heavily on the tech sector and could be a simpler option for investors of all experience levels looking to benefit from the ongoing tech and AI trends.
Key players like Apple, Nvidia, Microsoft, Amazon, and Meta Platforms are driving the AI revolution with innovative products and services. The Vanguard ETF’s top holdings reflect these influential companies and their impact on the AI sector, providing investors with a diversified exposure to the fast-growing industry.
The Vanguard Mega Cap Growth ETF has a strong track record of outperforming the S&P 500, with a compound annual return of 13.3% since inception in 2007. The ETF’s focus on tech, cloud computing, and AI has fueled its accelerated annual average return of 16.3% over the last decade, showcasing the potential for significant growth in the tech sector.
Major tech companies like Microsoft, Amazon, Alphabet, and Meta are expected to invest a combined $300 billion in AI development in 2025, driving further innovation and revenue growth. However, the success of these investments is crucial for the future performance of both individual tech stocks and broader market indices like the S&P 500.
Investors considering the Vanguard ETF should be mindful of the risks associated with the AI sector and ensure a balanced portfolio that can weather potential fluctuations in the market. With the ongoing AI revolution shaping the tech landscape, strategic investments in ETFs like the Vanguard Mega Cap Growth ETF could offer significant opportunities for growth and long-term returns.
Read more at NASDAQ: Meet the Magnificent Vanguard ETF With 37.6% of Its Portfolio Invested in Nvidia, Apple, and Microsoft