VGT ETF heavily concentrated in 3 tech giants, risking less diversification than expected.

The Vanguard Information Technology Index Fund ETF (VGT) offers exposure to hundreds of tech stocks but is heavily concentrated in just three companies: NVIDIA, Apple, and Microsoft, which together make up over 40% of the portfolio. This concentration means that a significant portion of an investor's money depends on the performance of these mega-cap stocks, which can increase risk, especially if the tech sector faces a downturn. While VGT has a low expense ratio of 0.09% and strong long-term returns, investors should be aware that owning VGT alongside broad market funds may lead to overlapping exposures rather than true diversification. Alternatives like Fidelity's FTEC and iShares' IYW have similar concentration issues, so truly diversifying requires broader or equal-weighted tech funds.