5 Best Vanguard ETFs to Invest In

3. Vanguard Information Technology Index Fund ETF Shares (NYSE:VGT)

Vanguard Information Technology Index Fund ETF Shares (NYSE:VGT) tracks the performance of a benchmark index that holds stocks from the information technology sector. As of January 31, 2022, the ETF owns 360 stocks, with the top ten stocks comprising 60.50% of the total investments. The total net assets held by Vanguard Information Technology Index Fund ETF Shares (NYSE:VGT) equal $58.5 billion. 

Visa Inc. (NYSE:V) is one of the prominent underlying stocks in Vanguard Information Technology Index Fund ETF Shares (NYSE:VGT)’s portfolio, which is a financial technology firm that provides payments solutions worldwide. Of the 142 hedge funds that were bullish on Visa Inc. (NYSE:V) in Q4 2021, TCI Fund Management is the biggest shareholder of the company, with a stake exceeding $5 billion. 

Here is what Artisan Value Fund has to say about Visa Inc. (NYSE:V) in its Q4 2021 investor letter:

“We initiated two new positions in Q4, adding Visa. Visa is a global payments company and is one of the four major US credit card networks (along with Mastercard, American Express and Discover). Visa is accepted at over 80 million merchant locations in 200 countries, interacts with 15 thousand financial institutions and processed 165 billion transactions with $13 trillion of payments and cash volume in the 12-month period ending September 2021. We have always admired Visa’s business, but its valuation prevented it from getting over the hurdle and into the portfolio. As of late, the stock has been caught up in indiscriminate selling as part of a larger unwind trade in a richly valued fintech space. Concerns also exist about Visa’s slowdown in cross-border transactions due to COVID and its net-revenue sharing arrangements with Amazon. This created an opportunity to purchase a very high quality business that benefits from substantial barriers to entry, network effects and several structural growth drivers, including consumer spending growth, the shift from cash to card, increasing ecommerce penetration, market share growth and global expansion. We believe Visa has a long runway for revenue growth as cash and checks continue to lose share. Consumers can’t use cash and checks online, after all. From a “safer” perspective, the company has a rocksolid balance sheet and has a high conversion of net income to free cash flow, which it uses for share repurchases, dividend growth and tuck-in acquisitions.”