Finance

Unlock Tech Titans: Can the Vanguard Information Technology ETF Turn $1,000 into a Fortune?

Vanguard’s tech ETF (VGT) rose 1.56% to $774.14, with a 23.45% average annual return over a decade.

byAndres Castro

October 26, 2025, 5:28 PM

The logo for Vanguard, a major investment and brokerage services company, on a smartphone. By Evolf / Shutterstock.com.

Executive Summary

The Vanguard Information Technology ETF (VGT) offers diversified exposure to the technology sector through 314 stocks, with key holdings in industry leaders like Nvidia, Microsoft, and Apple.

VGT has demonstrated strong historical performance, achieving a 10-year average annual return of 23.45%, significantly outpacing the Vanguard S&P 500 ETF and the broader market average.

Despite the tech sector’s susceptibility to short-term fluctuations, VGT presents significant potential for long-term wealth accumulation, advising investors to maintain a multi-year outlook.

The Story So Far

The Vanguard Information Technology ETF (VGT) is highlighted as a sector-specific fund exclusively invested in 314 technology stocks, designed to offer diversified exposure to the industry. It is noted for its strong historical performance, significantly outpacing broader market benchmarks with an average annual return of 23.45% over the past decade, thereby presenting substantial potential for long-term wealth accumulation despite the technology sector’s inherent short-term volatility.

Why This Matters

The Vanguard Information Technology ETF (VGT) offers investors a pathway to potentially significant wealth accumulation over the long term, driven by its historical outperformance within the technology sector compared to broader market indices. However, prospective investors must be prepared for the inherent volatility of the tech industry, underscoring the necessity of a patient, long-term investment strategy to navigate market fluctuations and capitalize on its growth potential.

Who Thinks What?

The Vanguard Information Technology ETF (VGT) is presented as a strong investment vehicle, demonstrating a 23.45% average annual return over the past decade and offering diversified exposure to leading technology companies with potential for significant long-term wealth accumulation.

However, investors are cautioned that the technology sector is susceptible to short-term fluctuations and increased volatility, advising a long-term outlook to navigate potential downturns, as past performance does not guarantee future results.

The Vanguard Information Technology ETF (VGT) is highlighted as a notable investment vehicle for individuals seeking exposure to the technology sector. As of October 24, 2025, the ETF was priced at $774.14, following a recent 1.56% increase. Over the past decade, VGT has reportedly delivered an average annual return of 23.45%, significantly outpacing broader market benchmarks.

Investment Strategy and Holdings

The Vanguard Information Technology ETF comprises 314 stocks exclusively from the technology industry. This sector-specific fund aims to provide diversified exposure to tech companies, thereby potentially mitigating some risks associated with investing in individual stocks.

Key holdings within VGT include industry leaders such as Nvidia, Microsoft, and Apple, which collectively account for nearly 44% of the fund’s total assets. The remaining 56% is distributed across an additional 311 technology companies, combining established corporations with smaller firms.

Performance and Risk Considerations

The ETF’s historical performance demonstrates a strong return profile, with its 10-year average annual return of 23.45% exceeding the 15.26% average annual return of the Vanguard S&P 500 ETF (VOO) over the same period. This also surpasses the market’s long-term average annual return, typically cited around 10%.

However, the technology sector is known for its susceptibility to significant short-term fluctuations, which can translate into increased volatility for tech-focused funds like VGT. Investors are advised to maintain a long-term outlook, ideally holding the investment for several years, to navigate potential downturns and benefit from market recoveries.

Potential for Wealth Accumulation

Analysis of VGT’s historical returns suggests the potential for substantial wealth accumulation over time. For instance, a hypothetical initial investment of $1,000, assuming a consistent 23.45% average annual return, could theoretically grow to approximately $556,000 over 30 years without additional contributions.

Furthermore, regular contributions could amplify these returns. A scenario where $50 is invested monthly, maintaining a 23% average annual return, could result in a portfolio value of approximately $1,296,000 after 30 years. It is important to note that past performance does not guarantee future results, and actual returns may vary.