This Tech ETF Is Down 16% From Its Peak. Here's Why I'm Still Buying.

Major market indexes have been steadily declining over the past few weeks, and tech stocks have been hit particularly hard. The tech-heavy Nasdaq Composite (NASDAQINDEX: ^IXIC) recently entered correction territory, falling by nearly 13% from its peak, as of this writing.

On the surface, right now may seem like a terrible time to invest in tech stocks. But there's one exchange-traded fund (ETF) that I'm loading up on, even though it's already plunged by more than 16%. Here's why.

Why I'm loading up on tech stocks right now

I've owned the Vanguard Information Technology ETF (NYSEMKT: VGT) for years, and even as its price plunges, I'm still investing consistently.

This ETF is down by around 16.4% from its peak in late 2025, as of this writing. In that time, its price has fallen from around $801 per share in October to roughly $665 per share, as of market close on March 30.

That may not seem like great news for investors like me, as it means my portfolio has shrunk in value over the past six months. But it also means that this ETF now costs around $136 less per share than it did just a few months ago.

Mindset is everything when investing. Some investors will see a 16% price drop as a loss in value, while others will see it as an opportunity to buy a high-priced investment at a 16% discount. Downturns are daunting, even to experienced investors. But they also create an invaluable opportunity to "buy the dip" and invest at lower prices.

The future is still bright for investors

There is a chance that stock prices will continue to fall in the coming weeks and months. However, this fund's diversified approach can help limit its risk.

The Vanguard Information Technology ETF holds 318 stocks. While around 44% of assets are allocated to its top three holdings -- Nvidia, Apple, and Microsoft -- the other half of the fund is dedicated to hundreds of stocks from all corners of the technology sector.

Mixing heavy megacap exposure with broad diversification can help mitigate risk. Industry-leading giants are more likely to thrive over time, even if they experience short-term volatility. But investing in hundreds of other stocks simultaneously can help reduce single-stock risk.

The key to long-term investing success

Keeping a long-term focus is key right now. Tech stocks are often hit harder than those in more established industries during recessions and bear markets, so this ETF and others similar to it could have further to fall. Over time, though, strong investments are likely to bounce back.

The Vanguard Information Technology ETF was launched in 2004, and it's survived the Great Recession, the COVID-19 crash, the bear market throughout 2022, and many smaller corrections along the way. Since its inception, though, it's earned total returns of around 1,550%. In other words, if you'd invested $5,000 in 2004, you'd have around $82,000 by today.

VGT Total Return Level data by YCharts

Again, be prepared for more significant volatility if you choose to invest in tech stocks or a tech ETF, and double-check that the rest of your portfolio is well-diversified with stocks from a variety of other sectors.

If you're able to hold your investment for at least a few years until the market inevitably recovers, investing in tech stocks now could be lucrative over time.

Katie Brockman has positions in Vanguard Information Technology ETF. The Motley Fool has positions in and recommends Apple, Microsoft, and Nvidia and is short shares of Apple. The Motley Fool has a disclosure policy.