The Vanguard Information Technology ETF has returned 23% year-to-date compared to 15.6% for the S&P 500.

The fund owns 314 tech stocks, including Nvidia, Microsoft, and Apple.

A rock-bottom expense ratio means costs barely register over decades of compounding returns.

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The artificial intelligence (AI) revolution is reshaping technology investing. Chips, software, cloud infrastructure – everything is getting repriced based on AI exposure. Nvidia dominates semiconductors. Microsoft leads cloud AI. Palantir Technologies powers enterprise applications. The Vanguard Information Technology ETF (NYSEMKT: VGT) owns all of them.

Year-to-date, this exchange-traded fund (ETF) has returned 23% compared to 15.6% for the benchmark S&P 500. The fund holds 314 tech stocks as of this writing on Oct. 29, charges a rock-bottom expense ratio, and rebalances automatically as winners emerge. When Nvidia exploded over the past few years, investors captured the gains without timing anything.

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Here’s why I’m loading up on the Vanguard Information Technology ETF.

Open this fund and you’ll find an AI all-star roster. Microsoft and Apple combine for roughly a quarter of holdings – two of the most valuable companies on Earth, both racing to embed AI into everything they touch. Nvidia represents a significant chunk, though its influence ripples through every semiconductor holding as the entire industry pivots to AI workloads.

The real genius lies in capturing AI’s spillover effects. Broadcom designs custom AI chips for cloud giants. Oracle retrofits databases for the AI era. Palantir embeds AI into government workflows. Advanced Micro Devices (AMD) competes directly with Nvidia. The fund holds every major chip company benefiting from AI demand, every software company adding AI features, and every hardware maker seeing data center buildout demand.

Some folks point out that technology’s massive S&P 500 weighting presently matches dot-com bubble peaks. They warn about concentration risk and suggest diversification. They’re missing the point entirely. The technology sector’s dominance reflects a fundamental truth: Software ate retail, transportation, and media over the past two decades. Now AI is eating software, and by extension, the world.

Consider what this fund avoids: utilities with tiny payouts; banks boxed in by regulation while fintech erodes their moat; retailers scraping by on single-digit margins while cloud platforms post fat operating profits. By focusing on technology, you skip the sectors being disrupted and own the disruptors. The expense ratio of 0.09% is rock bottom, so costs barely matter. Over decades, that edge can compound into six-figure extra returns.