From Yahoo Finance · · 1m 20s
$5,000 in VGT, 10 years later
A decade of tech dominance turned a modest VGT stake into a small fortune, and three stocks did much of the lifting.
In brief
A decade of tech dominance turned a modest VGT stake into a small fortune, and three stocks did much of the lifting. VGT's decade was extraordinary and unlikely to repeat, but big tech's weight still gives it a good shot at beating the market. Originally reported by Yahoo Finance.
Tech ran the decade
Information technology was the best performing sector of the past ten years, and tech ETFs like Vanguard's VGT rode the whole wave.
“Over the past decade, information technology (tech) has easily been the highest-performing sector in the stock market.”
$5,000 became $41,820
VGT climbed 736% over ten years. A $5,000 stake would sit at $41,820 today, or $45,150 once you count reinvested dividends.
“With dividends, it would be worth $45,150.”
Most gains came late
VGT launched in January 2004, but the bulk of its lifetime return arrived in the last ten years, averaging 23.7% a year.
“VGT has been around since January 2004, but most of its all-time returns have come in the past decade.”
Three waves, one fund
The run was not a single story. Smart hardware gave way to cloud computing, which gave way to the AI boom that sent tech stocks flying.
“It went from smart hardware to cloud computing to the artificial intelligence boom.”
Three stocks, 44% of it
As of July, Nvidia, Apple and Microsoft made up over 44% of the fund. VGT moves when they move, and those weights shift with market caps.
“VGT is very top-heavy, but that has worked in its favor over the past few years.”
Don't expect a repeat
Another 736% decade is a stretch. The more reasonable bet is that VGT beats the broad market as big tech keeps growing in importance.
“If you feel as if you missed the bus, don't fret.”
The key point
VGT's decade was extraordinary and unlikely to repeat, but big tech's weight still gives it a good shot at beating the market.
