The Illusion of Progress: A Tech ETF’s Blind Spot

A contemplative scene of technological advancement.

The Vanguard Information Technology ETF (VGT 1.69%), a vessel of considerable wealth accumulated over the past decade, has charted a course of impressive gains. Nearly 670% it has risen, a figure that dwarfs the more modest ascent of the S&P 500 at 270%. One observes, with a certain melancholy, how easily capital gravitates towards the glittering promises of the new. Yet, a closer inspection reveals a landscape not entirely defined by progress, but rather by a selective vision of it. The recent fervor surrounding artificial intelligence, that phantom of the modern age, has, it seems, cast long shadows, obscuring certain essential elements.

The ETF’s growth, undeniably fueled by the AI boom, presents a curious paradox. It is a vessel brimming with the fruits of technological innovation, yet, one wonders, is it truly capturing the full harvest? The concentration of its holdings—nearly 59% residing in the hands of a mere ten companies—is a testament to the consolidation of power within this digital realm. A delicate balance, easily disrupted, as any seasoned observer of markets will attest.

Company	Percentage of the ETF
Nvidia	17.47%
Apple	14.90%
Microsoft	12.19%
Broadcom	4.48%
Palantir (Class A)	1.95%
Advanced Micro Devices	1.70%
Oracle	1.60%
Micron Technology	1.60%
Cisco Systems	1.52%
IBM	1.38%

The dominance of Nvidia, Apple, and Microsoft – collectively claiming nearly 45% of the ETF’s assets – is striking. It is a familiar story, the old guard consolidating its position. One cannot help but wonder if this concentration, while yielding substantial returns in the present, might stifle the growth of more nascent, potentially disruptive forces. The missing pieces, however, are the truly telling aspect of this composition. The absence of certain key players – Alphabet, Amazon, Meta Platforms – speaks volumes about the limitations of a purely sectoral approach.

These omissions are not a matter of simple oversight, but rather a consequence of rigid categorization. The gatekeepers of indices, those meticulous classifiers of the financial world, have deemed Alphabet and Meta as belonging to the ‘communication services’ sector, while Amazon resides within ‘consumer discretionary.’ A curious arrangement, one might observe, as these companies are undeniably at the forefront of AI innovation. Amazon and Alphabet, in particular, control a substantial share of the cloud infrastructure—29% and 13% respectively—that underpins the entire AI ecosystem. To exclude them is to ignore the very foundations upon which this new technology is built.

Meta, though lacking a prominent cloud platform, is a significant player in the realm of open-source AI models and is poised to shape the future of digital advertising, for better or worse. An ETF that omits these titans, one feels, offers an incomplete and, therefore, a somewhat illusory exposure to the AI megatrend. It is a landscape painted with selective brushstrokes, a portrait that captures only a fragment of the whole. A melancholy thought, perhaps, but one that a discerning observer cannot ignore.

The pursuit of progress, it seems, is rarely a straightforward affair. It is a complex and often contradictory process, marked by both innovation and exclusion. The Vanguard Information Technology ETF, while a testament to the power of technological advancement, serves as a poignant reminder that even the most promising vessels can be hindered by the limitations of their own design.

2026-01-31 08:52

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