The Best-Performing Vanguard ETF Over the Last Decade Is Issuing an 8-for-1 Stock Split. But Should Investors Be Concerned That 44% of the ETF Is Invested in Just 3 Growth Stocks?

By Daniel Foelber – Apr 2, 2026 at 7:41PM ESTKey PointsThe Vanguard Tech ETF is set to issue a stock split later this month. The ETF is underperforming the S&P 500 and Nasdaq Composite in 2026. The fund is a good buy for investors who believe leading tech stocks, especially semiconductor companies, will continue to deliver outsize returns. Vanguard, one of the largest U.S. investment management firms, recently announced forward share splits on five equity index exchange-traded funds (ETFs), effective April 21. The splits will bring all five ETFs, currently trading at prices in the triple digits, down well below $100 a share. And since the Vanguard Information Technology ETF (VGT +0.85%) has the highest price per share at $668.70 at the time of this writing, it gets the largest split at 8-for-1, compared to 4-, 5-, or 6-for-1 splits for the other ETFs. Here's why the tech ETF could be a great buy now, and some risks worth considering. Image source: Getty Images. A decade of domination The Information Technology ETF's 23% average annual return over the last 10 years is head and shoulders above the second-place Vanguard Mega Cap Growth ETF and the other 63 Vanguard stock- and sector-focused ETFs. Here's a look at the impact of that rapid rate of compounding compared to the Nasdaq Composite (^IXIC +0.18%) and S&P 500 (^GSPC +0.11%). Data by YCharts. The formula is simple. Being heavily overweight in Nvidia (NVDA +0.87%), Apple (AAPL +0.11%), Microsoft (MSFT +1.01%), Broadcom, and other tech stocks relative to the S&P 500 has produced outsize returns. Especially the megacap tech stocks and the semiconductor industry, which make up over a third of the Vanguard Tech ETF. But concentration can backfire during a sectorwide sell-off.

The Vanguard Tech ETF is down 11.3% year to date, which is worse than the 7.3% decline in the S&P 500. The broader software industry has been under pressure lately, as evidenced by Microsoft's 33.8% decline from its all-time high. Even red-hot semiconductor stocks like Nvidia and Broadcom are selling off.

And Micron Technology is down a mind-numbing 22.3% in just the last week (as of market close on March 30). ExpandNYSEMKT: VGTVanguard Information Technology ETFToday's Change(0.85%) $6.00Current Price$712.65Key Data PointsDay's Range$688.79 - $713.0052wk Range$451.00 - $806.99Volume449K Top growth stocks at compelling valuations Despite including dozens of well-known growth stocks, the tech sector is concentrated in Nvidia, Apple, and Microsoft, which make up 44% of the Vanguard Tech ETF. Being heavily weighted in just a few stocks inherently adds risk to the Vanguard Tech ETF relative to other growth-focused ETFs. But the more valuations fall, the lower that risk becomes. Consider that Microsoft's forward price-to-earnings (P/E) ratio is now just 21.5. Meanwhile, Nvidia's forward P/E is 19.9, which is below the S&P 500 forward P/E of 20.5. Just a few months ago, Microsoft and Nvidia were trading at significant premiums to the index. Lower valuations reduce the need for quarter after quarter of blowout earnings -- which will appeal to investors who are concerned about the impact of a potential slowdown in artificial intelligence (AI) spending. Reasons to buy the Vanguard Information Technology ETF The Vanguard Information Technology ETF is a great buy for investors who want to build a portfolio around Nvidia, Microsoft, and Apple. It's an exceptionally good buy for investors who want a lot of exposure to the semiconductor industry, as you won't find nearly the same exposure to chip stocks in sector-agnostic growth stock ETFs. And the semiconductor industry has arguably benefited the most from AI innovation so far. Growth stock ETFs tend to be heavily invested in megacap tech stocks. Holding a tech sector ETF amplifies that bet -- which adds concentration risk -- but can also lead to outsize gains if those top stocks continue to drive the major indexes to new heights.Read NextApr 2, 2026 •By Katie BrockmanThis Tech ETF Is Down 16% From Its Peak. Here's Why I'm Still Buying.Mar 26, 2026 •By Josh Kohn-LindquistVanguard (VGT) vs. Roundhill Investments (CHAT): Which Technology ETF Reigns Supreme?Mar 26, 2026 •By Eric TrieIdentical Tech Exposure, Lower Cost or Greater Liquidity? VGT vs. FTECMar 24, 2026 •By Trevor JennewineBuy 2 Vanguard Index Funds to Beat the S&P 500 in the Next Year, According to Wall StreetMar 23, 2026 •By Chris Neiger3 Vanguard ETFs to Buy With $100 and Hold ForeverMar 18, 2026 •By Reuben Gregg Brewer1 Tech ETF to Buy Hand Over Fist -- and 1 to AvoidAbout the AuthorDaniel Foelber is a contributing Motley Fool stock market analyst with extensive experience covering the broader stock market and publicly traded companies across energy, industrials, utilities, materials, technology, communications, consumer discretionary, consumer staples, and financial stocks. Daniel looks for industry leaders offering compelling growth, value, or dividends to generate passive income. He has also written for energy trade publications and helped build oil and gas training modules. He holds a bachelor’s degree in finance and a certificate in personal financial planning from the University of Houston. He believes the best investors are those who focus on fundamentals, remain steady through volatility, and filter out market noise.TMFpalomino2Stocks MentionedVanguard Information Technology ETFNYSEMKT: VGT$712.65(+0.85%)+$6.00S&P 500 IndexSNPINDEX: ^GSPC$6,582.69(+0.11%)+$7.37AppleNASDAQ: AAPL$255.92(+0.11%)+$0.29MicrosoftNASDAQ: MSFT$373.46(+1.11%)+$4.09NASDAQ Composite IndexNASDAQINDEX: ^IXIC$21,879.18(+0.18%)+$38.23NvidiaNASDAQ: NVDA$177.28(+0.87%)+$1.53*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.