Vanguard Tech ETF Sprints 27% Ahead This Year Amid AI Frenzy

The Vanguard Information Technology Index Fund ETF (VGT) has been on a tear this year, with a 27% return. This tech-focused fund has consistently outperformed the S&P 500 for over a decade, and its heavy exposure to chipmakers positions it well for AI rallies.

Nvidia (NVDA) is the largest position in the fund, making up 17% of total assets, followed by Broadcom (AVGO), Micron (MU), and Advanced Micro Devices (AMD). These companies are poised to deliver exceptional fundamental growth amid the AI boom due to their involvement in chipmaking for hyperscalers' artificial intelligence infrastructure.

The tech sector has historically been one of the best ways to beat the S&P 500 over the long run, with VGT's annualized return of 24.4% over the past decade serving as an excellent example.