Morningstar Rating

ETF Research and Analysis

by Robert Goldsborough
Suitability
Vanguard Information Technology ETF VGT offers investors broad exposure to the technology sector. As a sector-specific exchange-traded fund, VGT should be viewed as a tactical investment, suitable only for the satellite   Read more 

Bull Case

About 80.5% of VGT's investments are in companies that have wide or narrow Morningstar Economic Moat Ratings--firms that Morningstar's equity analysts believe have durable competitive advantages.
The top holdings in this fund have strong balance sheets, which should support continued investment in R&D and growth strategies.
This ETF has the lowest expense ratio of any large and liquid technology-sector ETF. Read more 

Bear Case

The top 10 holdings account for 56% of this fund's portfolio, which means that this fund's performance and risk attributes are closely tied to just a handful of stocks.
A pullback in IT spending could weigh on the performance of this ETF.
The companies in this ETF operate in highly competitive industries characterized by rapid innovation that could erode a company's economic moat. Read more 

Online Giants in a Single Fund 
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