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Should You Invest in the Vanguard Information Technology ETF (VGT)?
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Looking for broad exposure to the Technology - Broad segment of the equity market? You should consider the Vanguard Information Technology ETF (VGT - Free Report) , a passively managed exchange traded fund launched on 01/26/2004.
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.
Additionally, sector ETFs offer convenient ways 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 9, placing it in bottom 44%.
Index Details
The fund is sponsored by Vanguard. It has amassed assets over $69.22 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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.10%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 0.66%.
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 100% of the portfolio.
Looking at individual holdings, Microsoft Corp (MSFT - Free Report) accounts for about 18.20% of total assets, followed by Apple Inc (AAPL - Free Report) and Nvidia Corp (NVDA - Free Report) .
The top 10 holdings account for about 60.04% of total assets under management.
Performance and Risk
So far this year, VGT has added roughly 13.48%, and was up about 31.80% in the last one year (as of 05/30/2024). During this past 52-week period, the fund has traded between $399.56 and $549.92.
The ETF has a beta of 1.16 and standard deviation of 24.57% for the trailing three-year period, making it a medium risk choice in the space. With about 317 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Information Technology ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, VGT is an outstanding 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 - Free Report) tracks Dow Jones U.S. Technology Index and the Technology Select Sector SPDR ETF (XLK - Free Report) tracks Technology Select Sector Index. IShares U.S. Technology ETF has $17.56 billion in assets, Technology Select Sector SPDR ETF has $66.64 billion. IYW has an expense ratio of 0.40% and XLK charges 0.09%.
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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Should You Invest in the Vanguard Information Technology ETF (VGT)?
Looking for broad exposure to the Technology - Broad segment of the equity market? You should consider the Vanguard Information Technology ETF (VGT - Free Report) , a passively managed exchange traded fund launched on 01/26/2004.
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.
Additionally, sector ETFs offer convenient ways 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 9, placing it in bottom 44%.
Index Details
The fund is sponsored by Vanguard. It has amassed assets over $69.22 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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.10%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 0.66%.
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 100% of the portfolio.
Looking at individual holdings, Microsoft Corp (MSFT - Free Report) accounts for about 18.20% of total assets, followed by Apple Inc (AAPL - Free Report) and Nvidia Corp (NVDA - Free Report) .
The top 10 holdings account for about 60.04% of total assets under management.
Performance and Risk
So far this year, VGT has added roughly 13.48%, and was up about 31.80% in the last one year (as of 05/30/2024). During this past 52-week period, the fund has traded between $399.56 and $549.92.
The ETF has a beta of 1.16 and standard deviation of 24.57% for the trailing three-year period, making it a medium risk choice in the space. With about 317 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Information Technology ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, VGT is an outstanding 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 - Free Report) tracks Dow Jones U.S. Technology Index and the Technology Select Sector SPDR ETF (XLK - Free Report) tracks Technology Select Sector Index. IShares U.S. Technology ETF has $17.56 billion in assets, Technology Select Sector SPDR ETF has $66.64 billion. IYW has an expense ratio of 0.40% and XLK charges 0.09%.
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.