History Says This ETF Could Be the Biggest Winner of the Stock Market Sell-Off
2026-10-25 12:45
•Todd Shriber •The Motley Fool
•••• ••••• Axe Cap view
Why South Africans Should Think Twice Before Chasing US Tech ETFs
The US tech-heavy Vanguard Information Technology ETF looks strong on paper but carries local risks for JSE investors.
Vanguard's VGT ETF has shown resilience after sell-offs, driven by semiconductor giants like Nvidia and mega-caps such as Apple and Microsoft. Given it’s a low-cost, diversified play on US tech, it’s tempting for South Africans seeking growth. But the catch is the USD/ZAR exchange rate. If the rand weakens—which it often does amid global market turbulence—the gains can be eroded or turn into losses when repatriated. Plus, the South African market offers its own tech exposure, notably via Naspers and Prosus, which benefit from the same global internet growth but have local currency risk, too. Semiconductors are a big bet here; their performance can be volatile and tied to global macro cycles. If the rand stabilises or strengthens, VGT could reward local investors well. But a weaker rand or a renewed tech sell-off in the US would sting. this is just our opinion and not financial advice
Watch the USD/ZAR closely before adding VGT. Prefer a cautious trim or wait-and-see stance. Naspers and Prosus offer partial local hedges with some dividend yield benefits but carry their own risks.
- VGT
- USD/ZAR
- Naspers
- Prosus
- Rand depreciation eroding USD gains
- US tech sector renewed volatility
6/10
The Vanguard Information Technology ETF (VGT) is highlighted as a potential rebound candidate following market sell-offs. With a $149 billion AUM, 318 holdings, and a low 0.09% expense ratio, the ETF has historically recovered sharply after pullbacks. Despite tech sector volatility in 2026, VGT is up 28% year-to-date, with significant exposure to semiconductor stocks (43.6%) and mega-cap tech names like Nvidia, Apple, and Microsoft.
Our take is based on reporting first published by The Motley Fool.