Why the Vanguard Information Technology ETF Remains Among the Best ETFs to Buy Today

Exchange-traded funds have transformed the investing landscape over the past decade, offering investors a straightforward way to gain diversified exposure across entire market sectors. Among the universe of best ETFs to buy, technology-focused options have gained particular prominence, and the Vanguard Information Technology ETF (VGT) stands out as a compelling choice for those looking to build a balanced portfolio with meaningful growth potential.

The Rise of Technology ETFs as Smart Investment Vehicles

When evaluating which are the best ETFs to buy, many investors overlook the importance of sector-focused funds. The Vanguard Information Technology ETF tracks a passive index concentrated on technology stocks, making it an efficient way to gain broad exposure to one of the market’s most dynamic sectors. What makes this ETF particularly relevant today is how it naturally captures emerging trends without requiring active portfolio management decisions.

The structure of the best ETFs like VGT typically includes a low expense ratio—in this case, just 0.09%—which means more of your investment gains remain in your pocket rather than being consumed by management fees. This efficiency has translated into solid performance over time, with the fund posting annualized returns of 22% over the past decade.

Understanding the AI Catalyst Behind ETF Performance

The technology sector’s explosive growth in recent years has been substantially driven by advances in artificial intelligence, and this trend is fully reflected in how the best technology ETFs perform. The S&P 500 rally throughout 2025 was disproportionately influenced by the largest companies in the index, many of which are concentrated in technology and AI development. Since the Vanguard Information Technology ETF holds 314 stocks with positions in leading players like Nvidia, Apple, and Microsoft—which together comprise approximately 45% of the fund—investors automatically gain exposure to both established tech giants and the AI revolution driving current market dynamics.

What distinguishes this particular fund from other options when considering the best ETFs to buy is its dual nature: while currently positioned to benefit from AI momentum, the passive structure means the fund’s composition will evolve as market leadership changes. Should different technology trends emerge or market dynamics shift, the ETF’s holdings will naturally adjust to capture those new opportunities.

Performance Metrics Worth Considering

During 2025, the Vanguard Information Technology ETF delivered returns of 21%, outpacing the broader market’s 17% performance. This isn’t simply a story of short-term momentum from AI enthusiasm. The fund’s decade-long track record demonstrates consistent outperformance, making it one of the most compelling options when evaluating which are the best ETFs to buy for long-term wealth building.

The combination of low costs, broad exposure, and strong historical returns creates a compelling case for inclusion in a diversified portfolio. However, it’s worth noting that the Motley Fool’s Stock Advisor team—which has historically identified top individual stocks—doesn’t list the VGT as its top recommendation, instead focusing on what they believe are the 10 best stocks for investors to buy right now.

Making Your Decision: When to Buy and What to Consider

For investors asking whether they should buy the Vanguard Information Technology ETF at current levels, the answer depends on individual circumstances. While the best ETFs to buy typically align with your long-term goals and risk tolerance, it’s equally important to recognize that individual stock picking can occasionally deliver outsized returns. Consider that Netflix investors who took action on Motley Fool’s December 2004 recommendation and invested $1,000 saw that position grow to $556,658. Similarly, those who bought Nvidia following the firm’s April 2005 recommendation turned a $1,000 investment into $1,124,157.

These historical examples underscore why some investors balance ETF exposure with selective individual stock positions. The Motley Fool’s broader Stock Advisor service has achieved average returns of 1,001%, substantially outperforming the S&P 500’s 194% return over comparable periods.

The best approach likely involves combining the stability and diversification of solid ETF choices like VGT with targeted individual stock exposure aligned with your conviction and risk capacity. Technology sector concentration through the Vanguard Information Technology ETF provides a disciplined way to participate in sector growth while maintaining the risk management benefits that diversified funds provide.