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It's hard to find a stock that's performed better than Nvidia over the last five years. Since 2019, its stock has turned in a mind-boggling 79% compound annual growth rate (CAGR). That means that $10,000 invested five years ago would be worth $187,000 today.

Unfortunately, there's no way to go back in time. So, what can investors do today to recreate some of that Nvidia lightning in a bottle? One way -- at least in part -- might be to invest in an exchange-traded fund (ETF) that focuses on the tech sector.

So let's look today at the Vanguard Information Technology ETF (NYSEMKT: VGT).

What is the Vanguard Information Technology ETF?

First things first. The Vanguard Information Technology ETF is an exchange-traded fund, which means it is a tradeable basket of stocks focused on the tech sector. Top holdings include Microsoft, Apple, Broadcom, and, yes, Nvidia.

One important aspect of the fund is that it is an index ETF, meaning that it is not actively managed. Instead, the fund seeks to replicate the performance of the MSCI US Investable Market Index/Information Technology 25/50 Index -- a basket of small, medium, and large tech sector stocks.

Thanks to this design, the fund's costs remain low, and, as a result, the fund's expense ratio is miniscule: 0.1%. That means for every $10,000 invested in the fund, investors pay only $10 a year in fees.

Why is the Vanguard Information Technology ETF a smart investment?

In general, ETFs can be a smart choice for most investors thanks to their built-in diversification. And in the case of the Vanguard Information Technology ETF, investors gain exposure to a broad array of tech stocks for a minimal fee.

Granted, the fund is top-heavy, with roughly 45% of its holdings concentrated in Microsoft, Apple, and Nvidia. However, that may not necessarily be a bad thing. Over the past five years, each of those stocks has walloped the S&P 500.

In any event, holding shares of the Vanguard Information Technology ETF is a way for investors to gain exposure to Nvidia while not owning Nvidia shares outright. That can be useful, particularly if investors want to lessen portfolio volatility.

Furthermore, since the fund owns hundreds of stocks, including small caps, there is upside potential, particularly if one of those small-cap stocks turns into the "next Nvidia."

Finally, there is the passive income. True, the fund's dividend yield is meager: a mere 0.7%. However, that is more dividend income than an investor would get by owning Nvidia shares alone, which have a dividend yield of only 0.2%.

Is the Vanguard Information Technology ETF a buy now?

The Vanguard Information Technology ETF is a well-constructed, affordable ETF that is a smart buy for many investors. That said, it's not for every portfolio. In particular, its high concentration of tech stocks -- Apple, Microsoft, and Nvidia in particular -- make it unsuitable for investors with outsize exposure to those stocks already. Moreover, given the fund's undersize dividend yield, income-seeking investors would be wise to look elsewhere.

However, for those looking for a tech-centered ETF with a low expense ratio, this fund is one to keep in mind. Indeed, it could be an excellent vehicle for investors who may have missed out on Nvidia's incredible five-year run but don't want to miss out on the next great tech stock.

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Jake Lerch has positions in Adobe and Nvidia. The Motley Fool has positions in and recommends Accenture Plc, Adobe, Advanced Micro Devices, Apple, Cisco Systems, Microsoft, Nvidia, Oracle, and Salesforce. The Motley Fool recommends Broadcom and recommends the following options: long January 2025 $290 calls on Accenture Plc, long January 2026 $395 calls on Microsoft, short January 2025 $310 calls on Accenture Plc, and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.