1 Unstoppable Vanguard ETF to Buy and Hold for the Next Decade

5 days ago 6

David Dierking, The Motley Fool

Wed, May 6, 2026 astatine 10:37 AM CDT 4 min read

Given the returns connected tech stocks implicit the past decade, it mightiness beryllium casual to presume that the biggest gains person been had and there's small near successful the tank. But investors request to measure the situation from this constituent moving forward. Just due to the fact that a assemblage had large returns successful the past doesn't mean it can't person large returns successful the future.

I judge that's the lawsuit with the Vanguard Information Technology ETF (NYSEMKT: VGT). It's averaged a 24.3% yearly instrumentality implicit the past 10 years. While it's apt the adjacent 10 years won't nutrient those kinds of returns, the artificial quality (AI) revolution, successful its existent signifier of development, makes a beardown lawsuit for wherefore VGT could inactive beryllium the ETF to ain for the adjacent decade.

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Digital machine surface with "AI" astatine the center.

AI inactive makes the tech lawsuit compelling

The Vanguard Information Technology ETF holds much than 300 U.S. tech stocks successful sectors similar semiconductors, software, unreality infrastructure, and IT services. The portfolio is highly concentrated, with the apical 3 holdings being Nvidia, Apple, and Microsoft. Combined, they relationship for 44% of the fund's assets.

The bull lawsuit for VGT is built connected net growth. Tech net are expected to turn by 39% and gross by 24% successful 2026. Capital expenditures connected AI improvement volition proceed to enactment the lawsuit for tech stocks done 2027 and beyond. The large tech companies are already committing hundreds of billions of dollars to AI development, but the roar is inactive successful its aboriginal stages.

All of the AI spending is already producing results, and it's apt to proceed good into the future. FactSet estimates that tech assemblage net volition turn by 39% and gross volition summation by 24% successful 2026. Earnings are expected to turn good into the treble digits again successful 2027. Growth rates are apt to shrink eventually, but tech stocks are apt to beryllium the large economical maturation motor for the adjacent respective years.

Short-term sentiment tin beryllium influenced by galore factors, but semipermanent show is usually driven by net growth. The tech assemblage volition person plentifulness of that for years to come. Companies volition support spending connected AI for years to come. And valuations person travel down rather a spot from their caller peak. It's a compelling concern lawsuit connected some valuations and maturation potential.

VGT: Performance and cardinal metrics

Metric

VGT

Expense ratio	0.09%
Assets nether management	$105 billion
Dividend yield	0.4%
Year-to-date return	11.4%
1-year return	50.7%
3-year annualized return	30.4%
5-year annualized return	18.1%
Number of holdings	317