The S&P 500 (Snpindex: ^GSPC) Has performed remarkably well in recent years, by about 23% in 2024 alone and with more than 80% in the past five years.
But no matter how strong those figures are, many shares and funds have recently crushed the S&P 500.
There is no way to know for sure how the market will perform in 2025, and higher risk, higher types of investments can often experience increased volatility in the short term. But there is one Powerhouse Vanguard ETF that has surpassed the S&P 500 in recent years, and there is reason to believe that it could continue that trend this year.
The Vanguard Information Technology ETF (Nysemkt: VGT) A fund is exclusively devoted to technical shares. Apple (Nasdaq: AAPL)” Nvidia (Nasdaq: NVDA)And Microsoft (Nasdaq: MSFT) are the three heaviest -weighted shares in this ETF, which form a combined 44.94% of the entire fund. The top 10 interests generally include almost 60% of the entire ETF, with the remaining 306 shares completing the other 40%.
An ETF that is so heavy weighed in the direction of a handful of shares can be both a risk and an advantage. On the one hand it offers much less diversification Then an ETF that is spread more evenly over a wide range of shares from several industries – increase the risk. That said, if these shares continue their winning series, you could see serious returns.
Many of the best interests of this ETF are strongly focused on progress in artificial intelligence (AI). For example, Nvidia is an important supplier of the graphic processing units (GPUs) that are used by many AI developers.
With AI who has been exploding in recent years, shares with a heavy focus on technology have risen with them. The Vanguard Information Technology ETF has achieved the total return of almost 74% in the last two years, compared to the total return of the S&P 500 of 48% at the time.
But it is not only recent developments in technology that have further propelled this fund. The Vanguard Information Technology ETF has a long history of achieving an above-average return, with an average return of more than 13% per year since its foundation in 2004 more than the historical average of the market of around 10% per year.
Although there are no guarantees that Big Tech shares will continue to bloom in the coming years, this ETF has a decades of history of the better performance of the market.
At the end of last month, Nvidia experienced a historic fall after the rise of Deepseek, a Chinese AI chatbot that could pose a competitive threat to other companies that was heavily focused on AI technology. The sharp decline wrote history as the biggest sale of one day for individual shares in American market history.