Invesco QQQ vs. Vanguard Information Technology ETF: Which Is Better for Tech Investors?

Published: Sunday, October 19, 2025 at 4:05 pm

Tech ETF Showdown: QQQ vs. VGT

The technology sector has been a powerhouse for investors over the past decade, with many of the world's most valuable companies operating in this space. For those seeking to capitalize on this growth, tech-focused exchange-traded funds (ETFs) offer a compelling option. Two popular choices are the Invesco QQQ Trust ETF (QQQ) and the Vanguard Information Technology ETF (VGT).

QQQ tracks the Nasdaq-100, a collection of the 100 largest non-financial companies listed on the Nasdaq exchange. While not exclusively tech, the tech sector constitutes over 60% of the fund. VGT, on the other hand, is a more focused tech ETF, holding 314 companies exclusively from the information technology sector. Both ETFs are weighted by market capitalization, meaning larger companies have a more significant impact on the fund's performance.

Over the past decade, both ETFs have delivered impressive returns. VGT has outperformed QQQ, with a return of 616% compared to QQQ's 468%. This translates to average annual returns of 21.8% for VGT and 19% for QQQ. VGT's recent outperformance is partly attributed to the growth of companies like Nvidia, which holds a significant portion of the ETF.

VGT also boasts a lower expense ratio of 0.09% compared to QQQ's 0.2%. This difference, while seemingly small, can accumulate over time, potentially impacting long-term returns.

However, VGT's concentration in a few key companies raises concerns. A significant portion of VGT's holdings are in just a few companies, making its performance heavily reliant on their success. QQQ, while also weighted towards these tech giants, offers greater diversification by including non-tech companies in its portfolio.

BNN's Perspective:

While VGT has demonstrated superior returns and lower fees, the concentration risk associated with its holdings warrants caution. QQQ's broader diversification, even with its higher expense ratio, may offer a more balanced approach for long-term investors seeking exposure to the tech sector.

Keywords: Tech ETFs, QQQ, VGT, Invesco, Vanguard, Nasdaq-100, Information Technology, Investment, Technology Sector, ETF Performance, Expense Ratio, Diversification, Nvidia, Market Cap, Tech Stocks

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