The Vanguard Information Technology ETF (VGT) has delivered impressive annualized returns of 24.7% over the past 10 years, outperforming the Nasdaq-100 index. Despite its broad mandate to hold 318 stocks across the tech sector, VGT's top holdings are heavily concentrated in just four major tech names: Nvidia, Apple, Microsoft, and Broadcom. Together, these four stocks make up about 49% of the fund's assets as of September 30, 2026.
VGT's strong performance, with average annual returns of 15.03% since its inception in 2004, has been driven by its focus on growth stocks. However, the fund does not include some well-known tech companies like Alphabet, Amazon, Meta Platforms, or Tesla because they fall outside the information technology sector as defined by its benchmark index.
Investors considering VGT should be aware of its concentration risk. The top four holdings alone account for nearly half of the fund's assets, which could be a concern for those seeking broader diversification. Comparatively, the Vanguard S&P 500 ETF (VOO) and the Invesco Nasdaq-100 ETF (QQQM) offer more balanced exposure to tech stocks, including some that VGT excludes.
For those who prefer VGT's mix of stocks and its track record of outperforming the Nasdaq-100, the fund remains a strong choice. However, investors concerned about overconcentration in just four stocks may find better diversification in other tech ETFs.