The S&P 500 (Snpindex: ^GSPC) Has performed remarkably well in recent years, ascending about 23% in 2024 alone and more than 80% over the last five years.
But as strong as those figures, plenty of stocks 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 types of higher risk investments can often experience more volatility in the short term. But there is one Vanguard ETF powerhouse that has exceeded the S&P 500 in recent years, and there is a reason to believe it could continue that trend this year.
The Vanguard Information Technology ETF (Fresh sampled: VGT) is a reservoir dedicated only to technology stocks. Apple (NASDAQ: AAPL). Nvid (NASDAQ: NVDA)and Microsoft (NASDAQ: MSFT) are the three most weighted stocks in this ETF, forming 44.94% combined from the entire fund. The top 10 charges generally include nearly 60% of the entire ETF, with the remaining 306 stocks rounding the other 40%.
ETFs that is greatly weighted towards a handful of stocks can be a risk and advantage. On one hand, offers much less diversify than an ETF that is more evenly dispersed across a wide variety of stocks of multiple industries – increased risk. That said, if these stocks continue their winning streak, you could see serious gains.
Many of the best holdings of this ETF focus heavily on developments in artificial intelligence (AI). Nvidia, for example, is a key supplier of the graphics processing units (GPUs) used by many AI developers.
With AI exploding in recent years, stocks with a heavy focus on the technology have increased with them. Vanguard ETF Information Technology has gained total earnings close to 74% over the last two years, compared to the total S&P 500 earnings of 48% in that time.
But it's not just recent developments in technology that have driven this fund further. The Vanguard Information Technology ETF has a long history of gaining above average earnings, with an average return of more than 13% per year since its inception in 2004-higher than the historic market average of about 10% per year.
Although there are no guarantees that large technology stocks will continue to thrive in the coming years, this ETF has a decades history of outperforming better than the market.
Late last month, Nvidia experienced a historic fall after the appearance of Deepseek, Chatbot AI Chinese that could pose a competitive threat to other companies that focused heavily on AI technology. The sudden decline made history as the largest one -day sales for individual stock in US market history.