As mentioned, this ETF is similar to the very popular Vanguard Information Technology ETF, but it has a slightly lower expense ratio at 0.08% versus 0.10% for the Vanguard fund. But both are among the best choices in its class for their top-tier long-term returns and diversification relative to other technology-focused ETFs.
2. Vanguard Total Stock Market ETF
The Vanguard Total Stock Market ETF (NYSEMKT: VTI) makes for an excellent core holding in any long-term portfolio and complements the more aggressive, sector-focused Fidelity MSCI Information Technology ETF. As the name suggests, this is an ETF that covers the entire spectrum of the U.S. equity market via the CRSP US Total Market Index. The ETF includes over 4,100 stocks, which represent approximately 100% of the investable U.S. stock market, from mega-caps to micro-caps. Few ETFs offer such a broad diversified mix of stocks, and no other ETFs track this particular index.
Its largest holdings are Microsoft, Apple, and Alphabet and the top 10 holdings represent 25% of the fund.
This is one of the most popular ETFs on the market, with about $283 billion in assets. It’s popular for its broad diversification, to add ballast to a portfolio, but also because it has delivered strong returns. Since its inception in May 2001, it has returned 9% per year, on an annualized basis. That’s through a dot-com bubble, a house market crash, a Great Recession, and a pandemic crash. Over the last 10 years it has generated a 16.1% annualized return through Oct. 31. Over the last one-, three- and five-year period it has returned 43.9%, 21.7%, and 18.9%, respectively. Since 2009, this ETF has posted a positive annual return every year except for 2018 when it fell 5.3%.
