Tech Stocks Continue to Outperform Broader Market - Is VGT a Good Way to Add Exposure?

Technology stocks have consistently outperformed the market over the past 5 and 10 years. The Information Technology sector returned 160% over the past 5 years compared to 70% for the S&P 500.

The Vanguard Information Technology ETF (VGT) provides exposure to the tech sector. Top holdings are Apple, Microsoft, Nvidia, Broadcom, and Adobe.

The upside of VGT is historical outperformance and low fees. The downside is concentration risk, with 40% in just Apple and Microsoft.

VGT may be a good choice for investors lacking tech exposure, especially paired with an S&P 500 index fund in an 80/20 split.

Over the long-term, the S&P 500 has returned about 10% annually. A core position in an S&P 500 index provides a solid foundation.