Unlock the Power of Tech Giants with This Top-Performing ETF
The S&P 500 has seen a remarkable 30% surge over the past year, with a significant chunk of that growth attributed to a single stock: Nvidia. This chip giant has delivered an astonishing 186% return over the last 12 months, boasting a valuation of $3.6 trillion and representing 7% of the total value of the S&P 500.
The “Magnificent Seven” Tech Giants
Nvidia is part of an elite group of technology behemoths, dubbed the “Magnificent Seven,” which have generated an average return of 56% over the past year. These companies have a combined market capitalization of $16.9 trillion, accounting for 32.1% of the entire S&P 500. Investors without exposure to these tech stocks have likely underperformed the broader market.
Get Easy Access to Tech Giants with the Vanguard Mega Cap Growth ETF
The good news is that investors can easily tap into the growth potential of these tech giants through a well-performing exchange-traded fund (ETF). The Vanguard Mega Cap Growth ETF has nearly half of its portfolio invested in four of America’s largest tech stocks, consistently outperforming the S&P 500 over both short and long terms.
A Concentrated Portfolio with AI Powerhouses
The Vanguard Mega Cap Growth ETF holds just 71 different stocks, with a highly concentrated portfolio where the technology sector represents 61.4% of its value, followed by consumer discretionary at 20.3%. Its top four holdings alone account for 45.1% of its portfolio, featuring AI powerhouses like Apple, Nvidia, Microsoft, and Amazon.
Apple: The Biggest Distributor of AI to Consumers
Apple has recently rolled out its Apple Intelligence software, developed with OpenAI, delivering a range of new AI features for owners of the latest iPhones, iPads, and Mac computers. With over 2.2 billion active devices worldwide, Apple could become the largest distributor of AI to consumers.
Nvidia: The Leading Supplier of AI-Powered GPUs
Nvidia supplies the most popular data center graphics processing units (GPUs) for developing AI models. The company’s data center revenue has seen triple-digit percentage growth in each of the last six quarters, driven by surging demand. This momentum is expected to continue with the shipping of its powerful new Blackwell GPUs.
Microsoft and Amazon: Top Customers and AI Developers
Microsoft and Amazon are two of Nvidia’s top customers, using GPUs to deploy AI models in an affordable manner. Both companies have also developed their own AI chatbots and virtual assistants, which could become significant revenue drivers in the future.
A Diversified Portfolio with Low Expenses
The Vanguard Mega Cap Growth ETF is not just about AI; it also holds stocks like pharmaceutical giant Eli Lilly, payments powerhouse Visa, retail titan Costco Wholesale, and fast food goliath McDonald’s. With an expense ratio of just 0.07%, this ETF is incredibly cheap to own, making it an attractive option for investors.
Strong Historical Performance
The Vanguard Mega Cap Growth ETF has delivered a compound annual return of 13% since its inception in 2007, outperforming the average annual gain of 10.2% in the S&P 500 over the same period. Its accelerated compound annual return of 15.9% over the last 10 years aligns with the rapid adoption of technologies like enterprise software, cloud computing, smartphones, and AI.
Ride the AI Wave with the Vanguard Mega Cap Growth ETF
As AI continues to transform industries and drive growth, the Vanguard Mega Cap Growth ETF is well-positioned to benefit from this trend. With its concentrated portfolio of AI powerhouses and low expenses, this ETF is an attractive option for investors seeking exposure to the tech giants driving the market forward.
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