VGT – Vanguard Information Technology ETF – ETF Stock Quote
Vanguard Information Technology Index Fd earns an Average Process Pillar rating.
Morningstar’s algorithmically assigned Passive Process ratings are first formulated by comparing the historical efficacy of passive investments relative to active peers. This peer-level score is then adjusted based on the fund’s individual characteristics such as: its ability to diversify risk and represent the category’s opportunity set, while penalizing funds whose benchmark index could be hard to track. The fund’s Process Pillar is rated as Average, given it is fairly diversified and accurately represents the Technology category’s opportunity set. Passive Technology funds have historically turned in average performance compared with their active category peers. They have not shown a significant edge or disadvantage compared with active funds in this area of the market. Available data suggests that the fund should be able to efficiently track its benchmark index.
The investment strategy as stated in the fund’s prospectus is:
The investment seeks to track the performance of the MSCI US Investable Market Index/Information Technology 25/50. The fund employs an indexing investment approach designed to track the performance of the index, an index made up of stocks of large, mid-size, and small U.S. companies within the information technology sector, as classified under the GICS. The Advisor attempts to replicate the target index by seeking to invest all of its assets in the stocks that make up the index, in order to hold each stock in approximately the same proportion as its weighting in the index. It is non-diversified.
The portfolio is overweight in technology by 22.4 percentage points in terms of assets compared with the category average, and its energy allocation is similar to the category. The sectors with low exposure compared with category peers are communication services and consumer cyclical, underweight the average by 10.6 and 5.3 percentage points of assets, respectively. The strategy owns 312 securities and is relatively top-heavy. Of the strategy’s assets, 59.6% are concentrated within the top 10 holdings, compared to the category’s 48.4% average. And finally, in terms of portfolio turnover, on a year-over-year basis, 13% of the fund’s holdings have turned over, whether through increasing, decreasing, or changing a position.
