A single fund has quietly become one of the more remarkable performers in the exchange-traded fund universe. The Vanguard Information Technology ETF, which trades under the ticker VGT, has delivered a 24% annualized return over the past decade, according to Yahoo Finance. At its current price of around $120 per share, a continuation of that pace would push the fund past $1,000 per share by 2036.
VGT has been around since 2004 and has posted a 14.6% annualized return since its launch. Over the past one, three, and five years, annualized returns have ranged from 17.8% to 31.7%. Those numbers reflect the extraordinary performance of semiconductor stocks, which have become central to the buildout of artificial intelligence infrastructure.
Nvidia is the fund's largest holding, accounting for 17.2% of the portfolio. Broadcom ranks fourth at 4.2%. Over the past decade, Broadcom has delivered an annualized return of 35.5%, while Nvidia has returned 63.8% annually. Both companies have been major drivers of VGT's overall performance, and analysts broadly expect them to remain so.
The bull case for the fund rests heavily on projections for the semiconductor industry. A Deloitte outlook cited by Yahoo Finance projects that global semiconductor sales will more than double, rising from $975 billion this year to $2 trillion by 2036. Most analysts believe the AI infrastructure buildout is still in its early stages, which would support continued demand for the chips that Nvidia and Broadcom produce.
The fund also holds meaningful positions across other major technology and AI companies, giving investors broad exposure to the sector through a single, passively managed vehicle.
The risks are real. Growing competition in the AI semiconductor market could compress profit margins. There is also the possibility that AI fails to deliver the productivity gains many investors are pricing in, which could slow spending across the sector and weigh on the fund's largest holdings.
Past performance offers no guarantee of future returns, and a fund that has benefited from a decade of semiconductor outperformance faces a higher bar going forward. Still, for investors who want passive exposure to one of the largest technology shifts in recent history, VGT concentrates that bet into a single ticker.
