Where Will VGT Be in 20 Years? Here's What History Suggests.
Key Points
The Vanguard Information Technology ETF (VGT) has delivered an average annual return of 15.03% over the past 22 years.
If that same annualized rate of return continues for 20 more years, a one-time $10,000 investment in VGT could grow to $164,521 after two more decades.
Tech stocks have been among the best investments for the past 15 years or more. The best tech exchange-traded funds (ETFs) put your money into innovative, fast-growing companies like the ones building the future of artificial intelligence (AI). But some investors are getting nervous about AI stocks. What does the future hold for tech ETFs? Can the recent run of strong returns really keep going?
The Vanguard Information Technology ETF (NYSEMKT: VGT) is one of the best tech ETFs. It has a 22-year track record of 15.03% annualized returns since its inception in January 2004.
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Let's look at what could happen for VGT investors if this tech ETF keeps delivering that same 15.03% average annual return for the next 20 years.
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VGT: 20 (more) years of 15.03% annualized returns
There are no guarantees that any stock, sector, or ETF will continue to deliver as it has. The tech sector could enter a major sell-off or long-lasting bear market. VGT might underperform the S&P 500 index at some point.
But for this example, let's assume that the Vanguard Information Technology ETF delivers 15.03% average annual returns for the next 20 years. If you invest $10,000 today in VGT and it compounds at 15.03% for the next two decades, after 20 years you'll have $164,521.
If you start with nothing and invest $500 a month in VGT, earning 15.03% annualized returns, after 20 years you'll have $616,852.
Ben Gran has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.