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Technology stocks and funds have surged in recent years as investors positioned for artificial intelligence (AI). One of the best-performing vehicles has been the Vanguard Information Technology ETF (VGT), which has gained 136% over the past three calendar years. Since the start of this year, the fund is down about 6%, but it is still trading around $700 per share, near a peak price of more than $750.
In a couple of weeks, Vanguard plans to implement share splits for several of its funds, including the Vanguard Information Technology ETF. Vanguard said the move is intended “to widen availability for investors by keeping share prices within accessible trading ranges.”
A share split increases the number of shares held by existing investors without changing the total value of their investment. The split ratio determines how many additional shares shareholders receive and how the price per share adjusts accordingly. For example, in a 10-for-1 split, an investor holding 1 share would receive nine additional shares, bringing a $1,000 share down to about $100 per share.
For VGT, Vanguard is conducting an 8-for-1 split. That means holders will receive seven additional shares for every share they already own. Based on the ETF’s current level, the split would reduce the per-share price to just over $85.
The date of record for the Vanguard split is April 17. Investors who want to participate should buy before or as of that date. If an investor purchases shares between April 17 and the split date, the right to the additional shares transfers to the buyer.
VGT will begin trading at the split-adjusted price on April 21.
Stock splits lower the per-share price but do not change the underlying fundamentals of a fund or its holdings. As a result, buying before or after the split should not affect the overall value of an investor’s position.
Vanguard Information Technology ETF remains positioned as a tech portfolio holding, offering exposure to major technology companies. The fund’s biggest holdings include Nvidia, Apple, and Microsoft, among others.
Based on the information provided, investors do not need to rush to buy VGT shares ahead of April 17; it is described as a suitable investment either before or after the split.
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