The right investment can supercharge your portfolio, and exchange-traded funds (ETFs) can be a simple way to generate wealth with next to no effort.
An ETF is a basket of securities grouped into a single fund, meaning you can instantly invest in dozens of stocks with just one investment. Whether you’re short on time or are simply looking for a low-maintenance way to invest, opting for ETFs can help build a diversified portfolio with far less effort than buying individual stocks.
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There are countless ETFs to choose from, and the right option for you will depend on your goals and individual preferences. But there’s one powerful ETF I’m stocking up on in 2025 and beyond: the Vanguard Information Technology ETF (NYSEMKT: VGT).
The Vanguard Information Technology ETF is a tech-specific fund containing 314 stocks from all corners of the technology industry.
This fund is heavily focused on major players in the tech sector, with its three largest holdings (Apple, Nvidia, and Microsoft, respectively) making up close to 45% of the entire fund. The other 311 stocks, then, each make up a much smaller percentage of the ETF.
This mix of industry leaders with smaller corporations can help balance risk and reward. You’ll gain a stake in tech titans like Apple and Nvidia, but you can also take advantage of the diversification perks of investing in hundreds of stocks at once.
If you’re looking for a way to buy into the tech sector with less effort, this ETF could be a smart option. This industry, specifically, has had an enormous impact on the market overall, accounting for much of the gains we’ve seen in recent years.
In fact, over the last 10 years, the Vanguard Information Technology ETF has earned an average rate of return of 20.59% per year. At that rate, if you were to invest, say, $200 per month, you could accumulate more than $1.2 million after 25 years.
Perhaps the biggest risk with investing in a tech-focused ETF is that this industry tends to be more volatile than more established sectors of the market. The tech field often experiences explosive returns when the market is thriving, but the downturns tend to be more severe, too.
Case in point: During the last bear market between January and October 2022, the S&P 500 (SNPINDEX: ^GSPC) fell by around 25%. The Vanguard Information Technology ETF, though, dropped by nearly 35% in that time.
