VGT ETF's top 3 tech stocks dominate; adding a value fund can reduce risk without triggering taxes.

The Vanguard Information Technology Index Fund ETF (VGT) is heavily concentrated in just three tech giants: Apple, Microsoft, and NVIDIA, which make up about 39% of the fund. This concentration poses a risk for long-term holders who face significant capital gains taxes if they sell to rebalance. A practical solution is to add a low-cost large-cap value fund like Vanguard Value ETF (VTV) to the portfolio, which dilutes the concentration without selling VGT shares and triggering taxes. This strategy suits investors wanting tech exposure but seeking to reduce single-stock risk without realizing gains immediately, though it may slow growth during tech booms and is best paired in tax-advantaged accounts.