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.
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 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.
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.