There is no doubt that the tech sector had a tough first few months of 2026. Over the primary three months, the tech sector was the worst-performing S&P 500 sector by a substantial margin. Nonetheless, issues have reversed course for the higher in April.
From April 1 to April 21, tech has been the best-performing S&P 500 sector, up over 15%. The sector’s volatility will seemingly proceed (particularly as key earnings strategy), however for those who’re in search of a low-cost approach to achieve publicity to the tech world, the Vanguard Development ETF (NYSEMKT: VUG) is an efficient possibility.
Will AI create the world’s first trillionaire? Our staff simply launched a report on the one little-known firm, referred to as an “Indispensable Monopoly” offering the important know-how Nvidia and Intel each want. Proceed »
It covers numerous floor, and its 0.03% expense ratio is without doubt one of the lowest within the inventory market.
VUG is not a pure-play tech exchange-traded fund (ETF) that solely holds tech corporations, however the tech sector accounts for almost 66% of the fund. That is greater than 4 instances the illustration of the second-most-represented sector, shopper discretionary (16.2%).
The ETF is weighted by market cap, so most of its prime holdings are huge tech corporations, together with 9 of the highest 10 holdings:
-
Nvidia: 13.31% of the ETF
-
Apple: 12.32%
-
Microsoft: 9.09%
-
Alphabet (Class A): 5.54%
-
Amazon: 4.59%
-
Broadcom: 4.40%
-
Alphabet (Class C): 4.38%
-
Meta Platforms: 4.15%
-
Tesla: 3.47%
-
Eli Lilly: 2.59%
In the event you’re investing in tech, these are corporations that you really want in your portfolio. As a substitute of getting to choose a “winner” (particularly because it pertains to the present synthetic intelligence gold rush), you possibly can financial institution on huge tech as an entire persevering with to develop and be dominant.
With simply these holdings, you’ve got the biggest cloud suppliers, a big proportion of enterprise software program, suppliers of AI {hardware} powering the AI increase, digital promoting giants, corporations coping with robotics, and loads of others.
And each time the tech sector hits a droop, you’ve got different sectors within the ETF to choose up a few of the slack and cushion the blow.
Because it hit the market in January 2004, VUG has skilled a number of volatility and wild swings. It is the character of the inventory market normally, particularly tech and progress shares, the place many investments are based mostly on potential and future earnings.
Nonetheless, VUG has comfortably outperformed the S&P 500 in that point, up 886% versus the index’s 511%. Quite a lot of the separation has come previously 5 years, with the surge in huge tech valuations. Nonetheless, VUG’s outperformance has been constant, with higher annual returns in 17 of twenty-two full years.
