Author Topic: VGT?  (Read 1134 times)

JenniferW

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VGT?
« on: September 11, 2018, 01:46:54 PM »
Looking at a few different Vanguard ETF funds, VOO & VGT included, for my retirement account.

I haven't invested anything yet but so tempted to just go with VGT for now.  I like the 22.5% annualized return it has had for the past 5 years and I still think tech will be going up for the next couple years at least.   I might switch at a later date to VOO.

Well what do you all think?  I am not afraid of stock market volatility .. actually makes me happy because I get to buy more shares at discounted price!

secondcor521

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Re: VGT?
« Reply #1 on: September 11, 2018, 02:47:10 PM »
For someone just starting out, I wouldn't recommend a sector fund like VGT, even though I like and worked in technology and am optimistic about it.  Although it has over 350 stocks, VGT has over 50% of its assets in it's top 10 holdings.  And again, it's a sector fund, so you're exposing yourself to volatility and risk and not getting rewarded for it, which in my opinion isn't a wise move.

VOO would be fine.  Personally if I were at your stage today and had to choose an ETF, I would go with VTI.

Good luck whatever you decide!

JenniferW

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Re: VGT?
« Reply #2 on: September 11, 2018, 02:50:40 PM »
I really want an index fund with large share of holdings in Amazon and Apple -- my two favorite companies.  Wouldn't mind some Facebook in that as well.   Any ETF recommendations?

secondcor521

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Re: VGT?
« Reply #3 on: September 11, 2018, 04:11:40 PM »
Apple and Amazon are the #1 and #3 holdings in VTI ;-)

https://investor.vanguard.com/etf/profile/portfolio/vti

MustacheAndaHalf

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Re: VGT?
« Reply #4 on: September 13, 2018, 07:13:39 AM »
To quote myself from another thread:
"VGT is currently in transition.  Vanguard is moving companies like Apple out of the index, and reclassifying those companies as consumer companies."

Also, you want to buy VGT because of it's past performance.  Every ETF prospectus, including VGT, contains a warning from the SEC.  From their website:
"That's why the SEC requires funds to tell investors that a fund's past performance does not necessarily predict future results."
https://www.sec.gov/answers/mperf.htm

ChpBstrd

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Re: VGT?
« Reply #5 on: September 13, 2018, 02:27:16 PM »
I like VGT and VTI, but they are very different animals. Yes, in this era of technology hyper-unicorns, even the total-market fund is dominated by Amazon and Apple, but as someone who lived through the 2000 tech crash (which quickly turned into an everything crash) I would warn against buying previous years tech stock returns. You don't actually get those returns when you buy them but you might end up selling them!

I also like SPTM, which is even cheaper than Vanguard.

MustacheAndaHalf

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Re: VGT?
« Reply #6 on: September 14, 2018, 12:53:44 PM »
I also like SPTM, which is even cheaper than Vanguard.
You might be surprised if you compare their performance over the past 10 years:

SPTM, 2732 stocks, (0.03%), 10 yr x 11.15%/year (NAV 11.17%/year)
ITOT, 3377 stocks, (0.03%), 10 yr x 11.13%/year (NAV 11.13%/year)
VTI, 3462 stocks, (0.04%), 10 yr x 11.21%/year (NAV 11.28%/year)

I list ITOT to show it's not just the number of stocks, since ITOT has more stocks and (very slightly) worse performance than SPTM.  All of these ETFs are good investments, with about the same return.  But VTI must be doing something slightly different to have a (very slightly) higher performance with almost identical holdings.