The stock market has seen increased volatility in 2025, partly due to President Donald Trump’s tariff actions. However, the market has shown resilience and recovered from earlier losses, with the Nasdaq Composite now slightly up year-to-date. The technology sector has played a significant role in this rebound.
The industry is currently undergoing a shift towards artificial intelligence (AI), which is projected to contribute up to $15.7 trillion annually to the global economy by 2030. So far, the performance of AI-related stocks has been mixed, making it challenging for investors to pick winners in the AI race. For those with limited capital, such as $500, diversifying their tech investments can increase their chances of achieving outsized returns.
One effective way to do this is by investing in an Exchange-Traded Fund (ETF) that spreads the investment across multiple companies. The Vanguard Information Technology ETF could be an excellent choice for an initial purchase. This ETF tracks the MSCI US Investable Market Information Technology 25/50 index, which includes over 300 technology companies.
By investing in this fund, your money is spread across hundreds of companies, from small-cap to large-cap, with the fund being market-cap weighted.
Diversified tech investments in ETFs
While not an AI-specific fund, the ETF includes leading artificial intelligence companies like Palantir Technologies.
This provides indirect exposure to AI advancements without the need to select individual stocks. Established in 2004, the Vanguard Information Technology ETF has demonstrated strong performance. Over the past decade, it has returned 543% (with dividends reinvested), compared to the broader market’s 245% gains.
Technology stocks often outperform many other sectors, contributing to the fund’s impressive returns. The fund’s expense ratio is just 0.09%, significantly lower than the average for indexed ETFs, which is around 0.41%. This means that for every $10,000 invested, you will only pay $9 in annual fees.
As of June 13, one share of the fund is priced at approximately $625. However, many brokerages offer fractional shares, allowing you to invest $500 without having to purchase a full share. Given the consistent outperformance of technology stocks and Vanguard’s offering of an affordable and diversified tech fund, the Vanguard Information Technology ETF presents a compelling option for investors looking to invest $500 right now.