1 Risky ETF You Want to Avoid Buying in December

Core Viewpoint - The technology sector has experienced significant growth, particularly due to the artificial intelligence boom, attracting many investors [1] Group 1: ETF Performance - The Vanguard Information Technology ETF (VGT) has increased nearly 21% year-to-date through November, outperforming the S&P 500 and Nasdaq Composite [2] - VGT tracks the U.S. information technology sector, comprising 314 companies across various industries, with the top five being semiconductors, systems software, technology hardware, application software, and semiconductor materials and equipment [3] Group 2: Concentration Risk - VGT is weighted by market capitalization, leading to a high concentration of a few large companies, which raises concerns about risk [4] - The top three holdings in VGT are Nvidia (18.18%), Apple (14.29%), and Microsoft (12.93%), collectively accounting for over 45% of the ETF [4][5] - High concentration can benefit investors when these companies perform well, but a downturn in any of them could negatively impact the entire ETF [8] Group 3: Alternative Options - There are alternative tech-focused ETFs, such as the Invesco QQQ Trust ETF, which holds a significant amount of Nvidia, Apple, and Microsoft but with lower dependency on their performance [6]