THE S&P 500 (Snpindex: ^ GSPC) has been remarkably well performed in recent years, soaring around 23% in 2024 only and more than 80% in the past five years.
But as strong as these figures are, many stocks and funds have crushed the S&P 500 in recent times.
There is no way of knowing with certainty how the market will take place in 2025, and types of higher and higher risk investments can often undergo increased short -term volatility. But there is an ETF Powerhouse Vanguard who has exceeded the S&P 500 in recent years, and there are reasons to believe that this could continue this trend this year.
THE Vanguard Information Technology FNB (NYSEMKT: VGT) is a fund solely dedicated to technological actions. Apple (Nasdaq: aappl),, Nvidia (Nasdaq: NVDA)And Microsoft (Nasdaq: MSFT) are the three most weighted actions in this FNB, representing 44.94% combined with the entire fund. The 10 main titles represent in the whole almost 60% of the entire FNB, the remaining 306 shares supplementing the other 40%.
An ETF which is so strongly balanced towards a handful of stocks can be both a risk and an advantage. On the one hand, it offers much less diversification than an ETF that spreads more uniformly on a wide variety of stocks of several industries – increasing risks. That said, if these actions continue their sequence of victories, you might see serious yields.
Many of the best assets of these ETFs are strongly focused on the progress of artificial intelligence (AI). NVIDIA, for example, is a key supplier of graphic processing units (GPU) used by many AI developers.
With the explosion of AI in recent years, stocks with an accent on technology have increased with them. The Vanguard Information Technology ETF has obtained total yields of almost 74% in the past two years, compared to total S&P 500 yields of 48% during this period.
But it is not only recent developments in technology that have propelled this fund more. The Vanguard Information Technology ETF has a long history of yield above average, with an average yield of more than 13% per year since its creation in 2004 – greater than the historic average of the market of around 10% per year.
Although there is no guarantee that major technological actions will continue to thrive in the years to come, this ETF has a history of several decades to outperform the market.
At the end of last month, Nvidia experienced a historic fall after the emergence of Deepseek, a Chinese AI chatbot which could constitute a competitive threat for other companies strongly focused on AI technology. The sharp decline made history as the largest sale of a day for an individual stock in the history of the American market.
