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Vanguard’s Tech ETF Rides AI Rally as Debate Grows Over Megacap Concentration

New coverage weighs VGT’s low-cost access to AI leaders against near-term risk from outsized stakes in Nvidia, Apple, Microsoft.

Overview

  • Vanguard Information Technology ETF is up about 21% this year, outpacing the S&P 500’s roughly 17% gain.
  • Nvidia, Apple and Microsoft together represent more than 45% of VGT’s assets, concentrating returns in a few megacap names.
  • The fund holds roughly 314 companies, carries a 0.09% expense ratio, and tracks the MSCI US Investable Market Information Technology 25/50 Index.
  • Supporters highlight efficient AI exposure, while skeptics urge caution now and point to alternatives like QQQ that are less top‑heavy with similar year‑to‑date results.
  • Contrasting outcomes across tech funds persist, with ARKK down about 28% over five years as VGT posts roughly 630% total returns over the past decade.