The Calculating Engines: CHAT vs. VGT

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The market, a grand and capricious beast, now fancies itself enamored with the notion of “Artificial Intelligence.” A most peculiar affection, considering the beast has never demonstrated much intelligence of its own. Two funds, the Roundhill Investments – Generative AI & Technology ETF (CHAT 0.45%) and the Vanguard Information Technology ETF (VGT +0.10%), present themselves as conduits to this new mechanical divinity. One, a nimble, if somewhat frantic, sprite; the other, a ponderous, well-established bureaucrat. Let us, then, dissect these contraptions, not with the cold precision of an accountant, but with the amused curiosity of a man observing a particularly elaborate clockwork toy.

CHAT, you see, is a creature of recent vintage, sprung forth from the ether following the sudden pronouncements of a digital oracle named ChatGPT. It proclaims itself a champion of “generative” intelligence – as if intelligence could be generated, like so many pamphlets in a provincial town. VGT, on the other hand, is a veteran of countless market skirmishes, a broad and sprawling empire of technology, its holdings numbering in the hundreds. It is the sort of fund one might expect to encounter presiding over a dusty archive, meticulously cataloging every conceivable innovation, no matter how trivial.

A Matter of Coin and Calculation

Metric VGT CHAT
Issuer Vanguard Roundhill Investments
Expense ratio 0.09% 0.75%
1-yr return (as of 2026-01-23) 16.8% 39.4%
Dividend yield 0.4% 2.7%
Beta 1.29 1.68
AUM $130.7 billion $1.0 billion

Observe the numbers. VGT, a veritable titan, commands a hoard of $130.7 billion. CHAT, a mere fledgling, possesses a paltry $1 billion. The expense ratio, a measure of the toll exacted by the fund managers, is a trifling 0.09% for VGT, but a rather audacious 0.75% for CHAT. One suspects the managers of CHAT are not merely tending to the fund, but also commissioning elaborate portraits of themselves in the style of Rembrandt. Yet, despite its extravagance, CHAT has, in the past year, demonstrated a return of 39.4%, dwarfing VGT’s 16.8%. A curious anomaly, indeed. Perhaps the managers are employing some sort of arcane algorithm, or perhaps they have simply bribed the market itself.

The Contents of the Mechanical Minds

CHAT, with a mere 52 holdings, is a focused, almost obsessive, creature. 85% of its assets reside in technology, with a smattering of communication services and consumer cyclical stocks. Its favored children include Alphabet (GOOGL 0.79%), NVIDIA (NVDA +1.60%), and Microsoft (MSFT +3.45%). It even subjects its holdings to an “ESG screen,” as if a machine could be judged by moral standards. VGT, by contrast, is a sprawling metropolis of 310 holdings, a veritable Babel of technology. 98% of its assets are dedicated to the sector, a testament to its unwavering commitment. NVIDIA, Apple (AAPL 0.13%), and Microsoft also feature prominently, but the sheer breadth of its holdings is astonishing. It is like comparing a meticulously crafted automaton to a chaotic, self-replicating swarm of gears.

The Beta, that measure of volatility, tells a tale of risk. CHAT, at 1.68, is a more spirited, but also more unpredictable, steed. VGT, at 1.29, is a more dependable, if somewhat plodding, workhorse. A prudent investor might prefer the stability of VGT, while a more daring speculator might be tempted by the potential rewards of CHAT.

What Does This Mean for the Poor Investor?

For those seeking a direct line to the burgeoning field of Artificial Intelligence, CHAT presents a compelling, if somewhat expensive, proposition. It is a fund for those who believe that machines will soon surpass human intelligence, and who wish to profit from this inevitable outcome. VGT, on the other hand, is a more diversified, and less speculative, option. It is a fund for those who believe that technology will continue to grow, but who are wary of placing all their eggs in one basket. It is, in essence, a fund for those who possess a healthy dose of skepticism, and a deep appreciation for the absurdities of the market.

CHAT is for the gambler, eager to chase the fleeting promise of technological transcendence. VGT is for the long-term custodian, content to accumulate wealth slowly and steadily, like a diligent peasant gathering grain. Choose wisely, dear investor, for the market, like life itself, is a capricious and unpredictable beast. And remember, even the most sophisticated calculating engine is ultimately subject to the whims of fate… and the occasional mischievous gremlin lurking within the wiring.

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2026-01-25 19:53