Vanguard's $143 Billion Tech ETF Outpaced QQQ and Charges Half the Fee

If you want broad exposure to big tech, the Invesco QQQ Trust (NASDAQ:QQQ) is often the first exchange-traded fund (ETF) that comes up. It tracks the Nasdaq-100 and manages roughly $490 billion in assets.

The Vanguard Information Technology ETF (NYSEMKT:VGT), with about $141.3 billion in net assets, has delivered stronger annualized returns over the past decade while charging a 0.09% expense ratio, compared with QQQ's 0.20%. If you want to check up on your financial health, comparing the funds' costs, holdings, and concentration could reveal which one better fits your portfolio.

VGT returned roughly 25% annually over the past decade

Over the 10 years through mid-July 2026, VGT delivered an annualized return of about 24.67%, compared to approximately 21.19% for QQQ, according to PortfoliosLab.

A hypothetical $10,000 invested in VGT a decade ago would have grown to roughly $91,000, compared to about $68,000 in QQQ. Year to date in 2026, the gap has widened, with VGT up about 22.94% versus QQQ's 16.13%. That performance difference exists despite both funds being passively managed, and it comes down to what each index includes and how it weights its top names.

The cost difference compounds quietly over time

VGT's 0.09% expense ratio means you'd pay about $9 annually for every $10,000 invested. QQQ's 0.20% rate costs roughly $20 for the same amount.

On a $100,000 portfolio held for two decades, that gap could add up to thousands of dollars in savings: money that stays invested and compounds alongside your returns. The average science and technology fund charges 0.54%, according to Vanguard's fact sheet, making VGT one of the lowest-cost options in the category.

QQQ tracks an index that reaches well beyond technology

Many investors treat QQQ as a tech fund, but it tracks the Nasdaq-100 — the 100 largest non-financial companies listed on the Nasdaq exchange. As of mid-2026, information technology makes up about 57% of QQQ's portfolio, according to Schwab's fund data. The remaining 43% spans several other sectors:

• Consumer discretionary names like Amazon and Tesla
• Communication services companies, including Alphabet and Meta Platforms
• Consumer staples such as Costco and PepsiCo

If you're buying QQQ for its "tech" exposure, roughly four out of every ten dollars you invest may land outside the technology sector.

VGT strips out everything except GICS information technology

VGT holds only companies classified under the Global Industry Classification Standard's (GICS) information technology sector, semiconductors, software, and hardware. That makes it a pure-play tech fund, but it also means it excludes Alphabet, Amazon, Meta, and Netflix entirely, because those companies fall under communication services or consumer discretionary in the GICS framework. If you think of those names as "tech," VGT's definition of the sector could be narrower than you expect.

VGT holds more than 300 stocks but three names carry over 40%

Here's where VGT's diversification pitch deserves scrutiny. As of March 31, 2026, the fund held 323 stocks, according to Vanguard. Yet its top three holdings: Nvidia (NASDAQ:NVDA) at 18.6%, Apple (NASDAQ:AAPL) at 15.9%, and Microsoft (NASDAQ:MSFT) at 10.2% — collectively accounted for about 44.7% of the fund. The top 10 represented 59.2% of total net assets.

By comparison, QQQ's top three — Nvidia at roughly 8.7%, Apple at about 7.1%, and Microsoft at approximately 5.3% — totaled around 21%. More holdings do not automatically translate to more balance.

Why that concentration has cut both ways

VGT's heavy tilt toward Nvidia, Apple, and Microsoft has been a tailwind during the AI-driven rally. Technology analyst Luke Lango, publisher of Innovation Investor, noted that the current tech rally is driven by earnings and AI infrastructure spending rather than geopolitical factors, according to Benzinga.

But the same concentration means a pullback in AI spending or a stumble from any of those three names could weigh heavily on the fund. In 2022, VGT dropped about 30%, while QQQ fell roughly 34%.

VGT's April 2026 share split lowered the per-share entry point

On April 21, 2026, Vanguard completed an 8-for-1 share split of VGT, bringing the per-share price down from roughly $900 to around $113, according to Vanguard. Shares recently traded near $117. The split changed nothing about the fund's holdings, concentration, or risk profile, but it may make the ETF more accessible if you prefer buying whole shares rather than fractional ones. It's a cosmetic change, not a strategic one.

Which type of investor each fund could suit

VGT may appeal to you if you want pure-sector technology exposure and are comfortable with heavy concentration in a few mega-cap names. Its lower expense ratio and historical outperformance could make it attractive for a long-term, growth-oriented allocation, provided you recognize that "300-plus holdings" does not equal broad diversification.

QQQ could be a better fit if you'd prefer exposure to high-growth Nasdaq-listed companies across multiple sectors. Its broader mix might offer slightly more cushion if technology specifically comes under pressure, though it still leans heavily toward growth. If your portfolio already holds a broad market index like the Vanguard S&P 500 ETF (NYSEMKT:VOO), adding either fund would increase your tech weighting meaningfully.

Bottom line

VGT has outperformed QQQ over the past decade while charging less than half the annual fee, but its concentration deserves attention because three stocks account for more than 40% of assets.

For investors ready to start investing in technology through an ETF, the decision may depend on whether they prefer VGT's focused technology exposure or QQQ's broader mix of Nasdaq-100 growth companies. Neither fund suits everyone, so reviewing fees, top holdings, sector exposure, and concentration is essential. Past performance does not guarantee future results.