Does Vanguard have any funds or ETFs that track the NASDAQ? What do you guys think of investing in VGT over QQQ?
|Funds||Vanguard Information Technology Index Fund ETF Shares||Invesco QQQ Trust|
|3-year total return||+29.15%||+26.94%|
|3-year standard deviation||20.84%||19.80%|
|Min. initial investment||$0||$0|
|Net expense ratio||0.10%||0.20%|
|Total net assets||48.59bn USD||182.66bn USD|
|Morningstar category||Technology||Large Growth|
VGT (an index fund) is supposed to be a Vanguard alternative to QQQ.
Its current benchmark is the MSCI US Investable Market Information Technology 25/50 Transition Index.
Technology companies have only outperformed recently. There are plenty of periods where they have gotten crushed. Heavily tilting your portfolio towards them after a significant runup in prices probably isn’t good.
I would suggest remaining diversified and using a total stock market index fund like VTSAX or FSKAX rather than trying to time the market with sector-tilted funds.
VGT is a Technology ETF. It isn’t diversified and only has exposure in one sector of the market. QQQ is the Nasdaq 100 Index fund that invests most of its assets in tech companies. It is more diversified than VGT but still heavily skewed towards the tech sector.
I bought the VGT ETF because I wanted more exposure to U.S. tech. I’ll own it forever (or near forever) because tech will always be relevant. I’ve never looked at its past performance because my returns reside in the future, not the past. That’s all.
VGT is more focused on infotech; QQQ has fewer holdings. VGT has more mid and small-cap exposure.
Invesco’s QQQ includes Amazon; VGT doesn’t. QQQ has more AAPL than MSFT but less of both than VGT. I don’t think VGT has GOOGL but don’t quote me on that. VGT has performed better than QQQ over the past five years by over 15%. So really, it just depends on what you want.
I own VGT, and it’s been a very good fund. Whether it’s a good fund to own in the future depends on when the tech boom ends, it could be over now. Many would argue that tech is overvalued, and if they are correct, it would be a bad time to buy VGT.
FTEC is the Fidelity equivalent of VGT. Both ETFs track the same underlying benchmark. The expense ratio of FTEC is 0.08%.