Vanguard funds show divergent trends in international performance and tech concentration

Vanguard's international index fund, VTIAX, has recently outperformed the US total market index, VTI. While US assets saw a return of approximately 240.8% as of August 2026, VTIAX recorded 147.62%. Year-to-date, VTIAX rose by 16.46%, exceeding VTI's 13.89%. Analysts from J.P. Morgan noted that international stocks returned 31% in US dollars in 2025, outperforming US stocks by 1,520 basis points. Factors cited for this shift include an overvalued US dollar and risks associated with the high concentration of technology companies in US indices.

In contrast, technology-focused funds like the Vanguard Information Technology Index Fund ETF (VGT) face significant concentration risks. These funds are heavily weighted toward a few major companies due to market capitalization weighting. For instance, VGT holds substantial positions in NVIDIA, Apple, and Microsoft. Similar patterns are seen in the Fidelity MSCI Information Technology ETF (FTEC), where these three companies account for 42.36% of the portfolio. Experts suggest that investors seeking true diversification should consider total market indices or equal-weight technology products to mitigate the volatility associated with these large-cap tech giants.