Vanguard Tech ETF Crushes S&P 500 with 27% Year-to-Date Return

The Vanguard Information Technology Index Fund ETF (VGT) has outperformed the S&P 500 by a significant margin this year, boasting a return of 27%. This tech-focused fund offers exposure to the AI trade and is filled with chipmakers that are poised to deliver exceptional fundamental growth amid the AI boom. Nvidia, the largest position in the fund, making up 17% of total assets, has given multi-year guidance implying AI revenue will continue to compound.

The largest positions in the portfolio account for a combined 11% of total assets and include Broadcom, Micron, and Advanced Micro Devices. These companies are leaders in the semiconductor industry and have been posting impressive revenue growth rates far surpassing the average S&P 500 company. Grand View Research projects a 30.6% compound annual growth rate (CAGR) for the artificial intelligence industry through 2033.

The Vanguard Information Technology Index Fund ETF has an annualized return of 24.4% over the past decade, making it an excellent example of how the tech sector can beat the S&P 500 over the long run. With a well-diversified portfolio and a low expense ratio of only 0.09%, investors can gain significant exposure to the AI trade without breaking the bank.