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Should You Invest in the Vanguard Information Technology ETF (VGT)?
Launched on January 26, 2004, the Vanguard Information Technology ETF (VGT) is a passively managed exchange traded fund designed to provide a broad exposure to the Technology - Broad segment of the equity market.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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Learn More Powered by Money.com - Yahoo may earn commission from the links above. Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Technology - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 5, placing it in top 31%.
Index Details
The fund is sponsored by Vanguard. It has amassed assets over $100.82 billion, making it the largest ETF attempting to match the performance of the Technology - Broad segment of the equity market. VGT seeks to match the performance of the MSCI US Investable Market Information Technology 25/50 Index before fees and expenses.
The MSCI US Investable Market Information Technology 25/50 Index is designed to transition in and out of securities affected by pending updates to the information technology sector.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.09%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 0.44%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Information Technology sector -- about 99.9% of the portfolio.
Looking at individual holdings, Nvidia Corp (NVDA) accounts for about 16.75% of total assets, followed by Microsoft Corp (MSFT) and Apple Inc (AAPL).
Performance and Risk
So far this year, VGT has added roughly 13.78%, and it's up approximately 31.72% in the last one year (as of 08/13/2025). During this past 52-week period, the fund has traded between $470.37 and $706.07.
The ETF has a beta of 1.25 and standard deviation of 24.78% for the trailing three-year period, making it a medium risk choice in the space. With about 321 holdings, it effectively diversifies company-specific risk.
Story Continues## Alternatives
Vanguard Information Technology ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, VGT is an excellent option for investors seeking exposure to the Technology ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
iShares U.S. Technology ETF (IYW) tracks Dow Jones U.S. Technology Index and the Technology Select Sector SPDR ETF (XLK) tracks Technology Select Sector Index. iShares U.S. Technology ETF has $23.33 billion in assets, Technology Select Sector SPDR ETF has $85.64 billion. IYW has an expense ratio of 0.39%, and XLK charges 0.08%.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Vanguard Information Technology ETF (VGT): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
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