If You'd Invested $5,000 in VGT 10 Years Ago, Here's Exactly How Much You'd Have Today
Key Points
The Vanguard Information Technology ETF (VGT) has averaged over 23% annual returns over the past decade.
Much of VGT's growth has come at the hands of the current AI boom.
- 10 stocks we like better than Vanguard Information Technology ETF ›
Over the past decade, information technology (tech) has easily been the highest-performing sector in the stock market. Its dominance is reflected in the performance of tech ETFs, such as the Vanguard Information Technology ETF (NYSEMKT: VGT).
Over the past decade, VGT is up 736%, meaning a $5,000 investment made then would be worth $41,820 today. With dividends, it would be worth $45,150.
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VGT data by YCharts
VGT has been around since January 2004, but most of its all-time returns have come in the past decade. In that time, it has averaged 23.7% annual returns (24.6% total returns). It went from smart hardware to cloud computing to the artificial intelligence boom that's sent tech stocks surging.
VGT is very top-heavy, but that has worked in its favor over the past few years. As of July, Nvidia, Apple, and Microsoft collectively account for over 44% of VGT, so, needless to say, the ETF moves as those stocks do. That hasn't always been the case, as the ETF's stock weightings fluctuate with changing market caps.
Image source: Getty Images.
If you feel as if you missed the bus, don't fret. VGT is well-equipped to remain an attractive ETF, though I wouldn't invest expecting it to return 736% over the next decade. I would, however, expect it to outperform the overall market over the next decade, with the importance and prominence of big tech growing seemingly daily.
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Stefon Walters has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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