Should You Invest in the Vanguard Information Technology Index Fund ETF Shares (VGT)?

If you're interested in broad exposure to the Technology - Broad segment of the equity market, look no further than the Vanguard Information Technology Index Fund ETF Shares (VGT), a passively managed exchange traded fund launched on January 26, 2004.

An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.

Investor-friendly, sector ETFs provide many options 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 3, placing it in top 19%.

Index Details

The fund is sponsored by Vanguard. It has amassed assets over $143.77 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

Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.

Annual operating expenses for this ETF are 0.09%, making it one of the least expensive products in the space.

It has a 12-month trailing dividend yield of 0.37%.

Sector Exposure and Top Holdings

ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.

This ETF has heaviest allocation in the Information Technology sector -- about 99% of the portfolio.

Performance and Risk

The ETF has gained about 24.96% so far this year and it's up approximately 36.26% in the last one year (as of 08/26/2026). In that past 52-week period, it has traded between $83.588 and $125.77.

The ETF has a beta of 1.34 and standard deviation of 24.15% for the trailing three-year period, making it a medium risk choice in the space. With about 324 holdings, it effectively diversifies company-specific risk.

Alternatives

Vanguard Information Technology Index Fund ETF Shares 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) tracks Dow Jones U.S. Technology Index and the State Street Technology Select Sector SPDR ETF (XLK) tracks Technology Select Sector Index. iShares U.S. Technology ETF has $24.74 billion in assets, State Street Technology Select Sector SPDR ETF has $118.39 billion. IYW has an expense ratio of 0.38%, and XLK charges 0.08%.

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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This article originally published on Zacks Investment Research (zacks.com).

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