AI Has Changed Everything About Tech Investing. VGT and CHAT Show You the 2 Ways to Play It.
Key Points
Vanguard Information Technology ETF offers a significantly lower expense ratio and higher assets under management (AUM) than the Roundhill Investments - Generative AI & Technology ETF.
The Roundhill Investments - Generative AI & Technology ETF has demonstrated higher 1-year total returns but also carries a higher beta and deeper historical drawdown.
Vanguard Information Technology ETF provides broad exposure to 310 technology companies while the Roundhill Investments - Generative AI & Technology ETF targets 52 holdings specifically involved in generative artificial intelligence.
- 10 stocks we like better than Vanguard Information Technology ETF ›
The Vanguard Information Technology ETF (NYSEMKT:VGT) offers broad, low-cost sector exposure, while the Roundhill Investments - Generative AI & Technology ETF (NYSEMKT:CHAT) provides an actively managed, concentrated play on the artificial intelligence boom.
Technology investors today face a distinct choice between broad sector indexing and focused thematic concentration. While the Vanguard fund tracks hundreds of established tech firms across the entire industry, the Roundhill fund focuses specifically on the emerging generative artificial intelligence landscape. This matchup compares a passive indexing giant with an active, high-conviction newcomer to see how their risks and rewards differ.
Snapshot (cost & size)
| Metric | CHAT | VGT |
|---|---|---|
| Issuer | Roundhill Investments | Vanguard |
| Expense ratio | 0.75% | 0.09% |
| 1-yr return (as of June 3, 2026) | 144.00% | 60.20% |
| Dividend yield | 1.70% | 2.00% |
| Beta | 1.83 | 1.34 |
| AUM | $2.2 billion | $144.2 billion |
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
The Vanguard fund is significantly more affordable with a 0.09% expense ratio, while the Roundhill fund charges 0.75% for its active management strategy. Investors seeking income may also note a slightly higher trailing-12-month dividend yield of 2.00% from the Vanguard ETF compared to the 1.70% payout from the Roundhill fund.
Performance & risk comparison
| Metric | CHAT | VGT |
|---|---|---|
| Max drawdown (3 yr) | (31.30%) | (27.20%) |
| Growth of $1,000 over 3 years (total return) | $3,760 | $2,378 |
What's inside
The Vanguard Information Technology ETF holds 310 stocks and focuses on the technology sector at 98%. Its largest positions include Nvidia (NASDAQ:NVDA) at 18.60%, Apple (NASDAQ:AAPL) at 14.82%, and Microsoft (NASDAQ:MSFT) at 10.02%. This passively managed fund was launched in 2004, has a trailing-12-month dividend of $2.41 per share, and tracks companies that serve the electronics and computer industries.
The Roundhill Investments - Generative AI & Technology ETF is an actively managed fund launched in 2023 with 52 holdings. It is primarily weighted toward technology at 77% and communication services at 17%. Top holdings include Micron (NASDAQ:MU) at 6.28%, SK Hynix (KRX:000660) at 5.86%, and Nvidia (NASDAQ:NVDA) at 5.81%. This fund has paid $1.68 per share over the trailing 12 months and incorporates an environmental, social, and governance (ESG) screen.
For more guidance on ETF investing, check out the full guide at this link.
What this means for investors
Artificial intelligence has rewritten the rules of the technology sector faster than almost anyone predicted. And the question facing investors today is not whether AI matters (it certainly does). These funds allow you to own the entire technology landscape and let the AI winners rise naturally to the top, or make a deliberate, concentrated bet on the companies building AI right now.
VGT has rewarded patient investors for more than two decades by simply owning American technology and staying out of the way. That discipline is underrated. Low-cost, broad technology funds have been pulling further ahead of narrowly focused AI counterparts in recent market shifts, a reminder that concentration cuts both ways.
CHAT has delivered extraordinary returns since launching in 2023, but three years is a short audition for a fund charging more than eight times VGT's fee. Active management needs to consistently outperform to justify that fee gap, and history suggests most actively managed funds eventually struggle to do so.
For most long-term investors, the case for VGT is not that it will always win; it is that its low cost and broad diversification make it easier to own through every kind of market. If you already hold broad tech exposure, adding CHAT means doubling down on names already prominent in your portfolio.
Should you buy stock in Vanguard Information Technology ETF right now?
Before you buy stock in Vanguard Information Technology ETF, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Vanguard Information Technology ETF wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $443,191!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,258,838!*
Now, it’s worth noting Stock Advisor’s total average return is 941% — a market-crushing outperformance compared to 211% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of June 7, 2026.
Sara Appino has positions in Apple and Nvidia. The Motley Fool has positions in and recommends Apple, Micron Technology, Microsoft, and Nvidia. The Motley Fool has a disclosure policy.
Recommended Articles
