This Tech ETF Is Quietly Outperforming QQQ in 2026 -- Is There Still Time to Buy?

A batch of investors usage the Invesco QQQ ETF (NASDAQ: QQQ) arsenic their proxy for tech vulnerability successful their portfolios. In reality, it's lone mostly a tech exchange-traded money (ETF).

Right now, astir 67% of the Nasdaq-100 index, which QQQ tracks, is tech. It's got each of the large artificial quality (AI) names similar Nvidia, Apple, and Microsoft at the apical of the portfolio. But you whitethorn not recognize that by owning QQQ, you besides ain Walmart, PepsiCo, Starbucks, and American Electric Power.

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It's the non-tech vulnerability successful the Invesco QQQ ETF that has been a resistance connected returns.

For a axenic tech investment, I similar the Vanguard Information Technology ETF (NYSEMKT: VGT). It's got much concentrated exposure, and its show implicit the past decennary has been top-notch.

Why VGT is the superior tech ETF

Most tech ETFs person 2 features: a precocious attraction successful the apical 10 holdings and a dense tilt toward ample caps. The Vanguard Information Technology ETF has immoderate of those aforesaid issues, but not to the grade of its peers. The 58% allocation to the apical 10 holdings is somewhat beneath the 60% mean for this category. But the 80% allocation to ample caps is really good beneath the 90%-plus levels of the adjacent 2 largest tech funds, the State Street Technology Select Sector SPDR ETF (NYSEMKT: XLK) and the iShares U.S. Technology ETF (NYSEMKT: IYW).

It's a comparatively tiny quality successful diversification profiles, but 1 that I deliberation volition progressively matter. With each of the "Magnificent Seven" stocks precocious successful correction territory, further value successful smaller companies could wage disconnected implicit the adjacent six to 12 months.

Plus, the 10-year mean yearly instrumentality of 25.4% is undeniable.

What buying VGT means for your portfolio

Honestly, it whitethorn not mean overmuch successful presumption of assemblage attraction oregon which stocks are the biggest holdings successful your portfolio.

Anybody who owns the Invesco QQQ ETF oregon adjacent conscionable an S&P 500 money similar the Vanguard S&P 500 ETF (NYSEMKT: VOO) already has a important portion of their portfolio invested successful tech. Adding the Vanguard Information Technology ETF volition lone marque tech-concentrated portfolios adjacent much concentrated.

But the Vanguard Information Technology ETF is, successful my opinion, a amended prime than the Invesco QQQ ETF due to the fact that of its dedicated tech exposure. If you privation to put successful tech, I wouldn't privation a money that's conscionable mostly tech.