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The Vanguard Information Technology ETF (NYSEMKT: VGT) has outperformed Invesco QQQ (NASDAQ: QQQ) over the past decade, yielding an average annual return of 19.79% compared to QQQ’s 16.99%. Investors placing $200 per month into each fund could see accumulated values of $437,000 for Vanguard after 30 years versus $312,000 for QQQ.
In terms of expenses, VGT features a significantly lower expense ratio of 0.09% compared to QQQ’s 0.20%, translating to $9 per $10,000 in fees for Vanguard investors, compared to $20 for QQQ. Though VGT focuses exclusively on tech stocks with 319 holdings, QQQ offers a more diversified portfolio with 101 holdings from multiple sectors, making it potentially less risky.
Investors must weigh the benefits of higher returns and lower fees against the risks of sector-specific investments in tech. Both funds offer solid options depending on individual investor goals and risk tolerance.
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