Top 10 Holdings %<\/strong><\/td>27.95%<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\nFrom the composition of both ETFs, I was able to depict that both are pretty good offerings from Vanguard funds<\/strong>. They both have a large number of holdings<\/strong>, and also they track two indexes that are in favor of investors.<\/p>\n\n\n\nHoldings<\/h3>\n\n\n\n The difference between the number of holdings of both VOO and VGT is noticeable. But, it is not a very big difference that if you choose VGT, it will harm your portfolio. The number of holdings is adequate in both the ETFs and can help diversify the portfolio.<\/p>\n\n\n\n
VOO has a slightly high number of holdings, 507<\/strong>. On the other hand, VGT offers 341<\/strong>. If we look at it on a large scale, then, yes, VOO has the edge over VGT here<\/strong>. It can help you efficiently diversify your portfolio by investing in well-established companies.<\/p>\n\n\n\nMoreover, coming to the holding percentage of both funds, VGT takes the lead here<\/strong>. With 59.20%<\/strong> of total weightage in the holding make it a strong contender. This means that long-term investment in the VGT could be a good decision instead of VOO.<\/p>\n\n\n\nAllocations<\/h3>\n\n\n\n In terms of market value, VOO’s top 10 holdings account for just a fourth of the entire portfolio compared to nearly half of the total assets held by VGT<\/strong>. From this, we can infer that the performance of VGT may be very dependent on the top ten holdings<\/strong>.<\/p>\n\n\n\nAnother thing I noticed about VGT is that Amazon, Facebook, and Google<\/em> are not included in the ETF. Amazon is listed as Internet & Direct Marketing Retail<\/em>, while Google and Facebook<\/em> are classified as Interactive Media & Services<\/em>.<\/p>\n\n\n\nYou get diversification across numerous sectors when you invest in VOO, from Information Technology to Healthcare and Real Estate.<\/strong> Whereas, with VGT, you get to invest mainly in the information technology sector. Investing in VGT is equivalent to investing 23.1%<\/strong> of the fund in firms under the Technology Hardware, Storage & Peripheral sector<\/strong>.<\/p>\n\n\n\nBoth VGT and VOO are exchange-traded funds. VGT has a superior 5-year return <\/strong>(27.78% vs 16.47 percent), according to past performance.<\/p>\n\n\n\nVGT vs VOO: Performance Summary, Source: portfoliovisualizer.com<\/figcaption><\/figure>\n\n\n\nDividend yield<\/h3>\n\n\n\n If you mark dividend yield as one of the determinants while choosing ETFs then, VOO is likely to be the one for you. With a 1.34%<\/strong> annual dividend yield, you can earn a good income, compared to the 0.64%<\/strong> of VGT.<\/p>\n\n\n\nRisk<\/h3>\n\n\n\n This has a simple answer that requires no guesswork or extensive research. The risk factor is clearly higher in the case of choosing VGT<\/strong> due to the higher return ratio. But, if you are confused between VGT vs VOO for investing in a long-term plan, selecting either of them will serve your purpose.<\/p>\n\n\n\nVolatility<\/h3>\n\n\n\n VGT is currently displaying a 37.05%<\/strong> volatility, more significant than the VOO’s 23.53%<\/strong>. Therefore, my investment advice is to be more careful while investing in VGT.<\/p>\n\n\n\nVGT vs VOO: Drawdowns, Source: portfoliovisualizer.com<\/figcaption><\/figure>\n\n\n\nReturns<\/h3>\n\n\n\n VOO gives you a total return of 15.13% per year<\/strong>, whereas VGT offers 20.94%<\/strong> each year. Each year, this gap widens by 5.81 percent<\/strong>!<\/p>\n\n\n\nLet’s look at a sample to see what I’m talking about returns. Assume you invested $10,000 in VGT, which tracks Tech Stocks, and $10,000 in VOO, which tracks the S&P 500 a decade ago. You would have ended up with $86,276<\/strong> with VGT and $49,351<\/strong> with VOO.<\/p>\n\n\n\nTherefore, VGT would have benefited you with a profit of $36,925<\/strong> more than VOO. That’s a noticeable difference!<\/p>\n\n\n\nAlso, keep in mind that technology has been steadily increasing in the last ten years, which explains the difference. Moreover, there is a higher risk in investing in VGT as well since it invests in firms from the same sector.<\/p>\n\n\n\n
Tax Efficiency<\/h3>\n\n\n\n The tax efficiency of both the exchange-traded funds will depend on your overall financial structure and income bracket<\/em>. However, the Vanguard ETFs are known for their tax efficiency<\/strong> compared to mutual funds.<\/p>\n\n\n\nVGT vs VOO – Environment, Social and Governance Ratings (ESG)<\/h2>\n\n\n\n The MSCI ESG Fund Rating<\/strong> is required since it assesses the flexibility of portfolios to return to long-term investments<\/a>. It includes long-term risks and opportunities that are the consequence of environmental, social, and governance factors<\/strong>.<\/p>\n\n\n\nBefore investing in any funds, I like to learn about the company’s environmental, social, and governance (ESG) history. It’s for our benefit, contributing to increased transparency<\/strong> on the long-term dangers involved.<\/p>\n\n\n\nHere are the ESG ratings of VOO and VGT –<\/p>\n\n\n\n<\/td> VGT (AAA)<\/strong><\/td>VOO (AA)<\/strong><\/td><\/tr>ESG Quality Score<\/strong><\/td>9.77\/10<\/td> 7.76\/10<\/td><\/tr> Peer Group Percentile Rank<\/strong><\/td>97.08<\/td> 68.49<\/td><\/tr> Global Percentile Rank<\/strong><\/td>97.14<\/td> 68.08<\/td><\/tr> SRI Screening Criteria Exposure<\/strong><\/td>0.17%<\/td> 5.58%<\/td><\/tr> Exposure to Sustainable Impact Solutions<\/strong><\/td>–<\/td> –<\/td><\/tr> Weighted Average Carbon Intensity (t CO2e\/$M Sales)<\/strong><\/td>20.58<\/td> 130.72<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\nThe ESG ratings clearly depict that VGT is far more superior to VOO in terms of the ratings. Now it all comes to which one you should choose?<\/p>\n\n\n\n
VGT or VOO – How to decide?<\/h2>\n\n\n\n Well, there are many technology ETFs, and choosing one can be difficult for you. But if you are stuck between VGT vs VOO, my answer would be to go with VGT. VGT (Vanguard Information Technology ETF) is the best choice based on past results, with a portfolio growth of nearly double that of VOO<\/strong>.<\/p>\n\n\n\nIn addition, it outperforms in terms of annual returns. There have been no negative yearly returns for the past ten years. I’m leaning toward VGT because of the performance. Also, I think that the technology sector will outperform other industries in the future.<\/p>\n\n\n\n
If you want to diversify your portfolio, VOO is the way to go. You can’t go wrong with a 15.13 percent annualized return over ten years<\/strong>, either.<\/p>\n\n\n\nBut always remember that “past performance data is not an indicator of future returns<\/em>” and that “volatility is a fact of life<\/em>.”<\/p>\n\n\n\nConclusion<\/h2>\n\n\n\n All in all, if you are curious about the best ETFs to buy right now, my opinion would be to go with Vanguard Information Technology ETF. This high-performing tech ETF<\/a> has outranked all the others since its release. It’s cheap, efficient, and tracks<\/strong> its stated index really well!<\/p>\n\n\n\nMoreover, most Vanguard funds are indeed known for being technologically advanced yet cost-efficient. So, whichever you choose, the journey is going to be smooth.<\/p>\n","protected":false},"excerpt":{"rendered":"
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