Invest in cutting-edge technologies like Artificial Intelligence, Quantum Computing, and Robotics with this all-encompassing Vanguard ETF.
Vanguard Information Technology ETF Offers Broad Exposure to Tech's Unlimited Upside
The Vanguard Information Technology ETF (VGT), a popular exchange-traded fund (ETF), provides investors with a front-row seat to the market opportunities presented by the technology sector. With a low expense ratio of around 0.10%, VGT offers broad exposure to over 300 technology-focused stocks spanning sub-sectors such as hardware, software, semiconductors, and IT services, primarily within large- and mid-cap U.S. companies.
Since its launch in 2004, VGT has positioned investors to capitalise on major tech transformations like the iPhone revolution, the cloud computing boom, and the AI explosion. The ETF's focus on technology firms makes it well-positioned to benefit from ongoing digital transformation and the anticipated economic impact of technological advances such as AI.
Over the past 10 years, VGT has delivered a 19.8% annualized return, surpassing the S&P 500's 13% average annual return over the same period. This impressive performance can be attributed to the ETF's diversified portfolio and its ability to track the MSCI US Investable Market Information Technology 25/50 Index, which aims to represent the entire U.S. information technology market.
One of the key advantages of VGT is its cost-effectiveness. With a low expense ratio, it offers investors the potential for higher net returns over the long term. In fact, over a 20-year period, a $100,000 investment growing at 10% annually could result in over $40,000 in extra returns due to VGT's low cost advantage.
VGT's diversified portfolio includes heavyweights like Nvidia, Microsoft, and Apple, which account for nearly 45% of the fund's assets. However, it also holds smaller firms with high growth potential. For instance, the fund owns companies developing quantum processors, AI chips, and robotics software, positioning it to benefit from the growth of emerging technologies.
The technology sector is not just a sector anymore; it's the very foundation of every industry, including banks, retailers, and traditional manufacturers. As such, the projected market sizes for AI, quantum computing, and robotics are massive. By 2030, the AI market is projected to reach $826.7 billion, with some projections reaching $1.8 trillion by 2034. The global robotics market is forecast to reach $375.8 billion by 2035, with the humanoid robot segment alone reaching $243.4 billion by the same year. The market for quantum computing is expected to reach $450 billion by 2040, according to a conservative estimate.
For investors seeking diversified yet focused technology exposure with potential for long-term capital appreciation while minimising costs, VGT is a deceptively simple investment vehicle that requires zero stock-picking skills from its investors. The VGT's total return level can be found on YCharts (June 17, 2025).
- Investing in the Vanguard Information Technology ETF (VGT) allows finance enthusiasts to capitalize on the unlimited upside of the technology sector, with a focus on digital transformation, AI, and emerging technologies like quantum processors and robotics.
- The low expense ratio of VGT offers viable opportunities for higher net returns over the long term, making it an attractive choice for those seeking cost-effective investment options in the technology industry.
- Given the massive projected market sizes for AI, robotics, and quantum computing, and VGT's diverse portfolio that includes heavyweights and small firms within these sub-sectors, this ETF could prove to be a lucrative investment for those interested in the business and finance aspects of technology.
