Here’s the high-level comparison between Vanguard Information Technology ETF, Invesco QQQ Trust, SPDR S&P 500 ETF Trust, and Berkshire Hathaway Class B over the past ~10–20 years.
| Asset | What it is | Approx 10Y CAGR | Approx 20Y CAGR | Volatility | Main Driver |
|---|---|---|---|---|---|
| VGT | Pure US tech ETF | ~22–24% | ~18–20% | Very high | Mega-cap tech dominance |
| QQQ | Nasdaq-100 ETF | ~21–22% | ~15–16% | High | Tech + growth stocks |
| SPY | S&P 500 ETF | ~15% | ~10–11% | Medium | Broad US economy |
| BRK.B | Berkshire Hathaway | ~12–13% | ~10–11% | Lower | Cash flow businesses + capital allocation |
QQQ and SPY performance figures are supported by long-term total return comparisons.
BRK.B long-term return estimates are supported by Berkshire/S&P comparisons and CAGR datasets.
The important part is why they behaved differently.
1. Why VGT and QQQ massively outperformed
VGT = concentrated AI/cloud/software/semi exposure
Vanguard Information Technology ETF is almost a direct bet on:
- NVIDIA
- Microsoft
- Apple
- Broadcom
- Adobe
- Salesforce
Over the last 15 years, software margins, cloud computing, smartphones, AI accelerators, and internet platforms created one of the strongest capital concentration cycles in history.
The key economic reason:
Software and semiconductors scale almost infinitely with low marginal cost.
For example:
- A railroad needs more track to grow.
- Insurance needs more underwriting capital.
- But software can serve millions more users with minimal incremental cost.
That creates:
- higher operating leverage
- higher ROIC (return on invested capital)
- faster earnings compounding
VGT is even more concentrated than QQQ in those winners.
That is why VGT generally beat QQQ.
2. Why QQQ beat SPY
Invesco QQQ Trust tracks the Nasdaq-100, which excludes:
- banks
- energy
- industrials
- many slow-growth sectors
So QQQ became heavily tilted toward:
- cloud
- semis
- internet
- AI
- SaaS
- hyperscalers
Meanwhile SPDR S&P 500 ETF Trust includes everything:
- utilities
- oil
- consumer staples
- insurers
- telecom
- etc.
So SPY has:
- better diversification
- lower concentration risk
- lower upside during tech supercycles
QQQ benefited from:
- zero-rate environment (2009–2021)
- explosive multiple expansion
- hyperscaler dominance
- AI wave
That produced extraordinary returns.
3. Why Berkshire underperformed QQQ/VGT
Berkshire Hathaway Class B is fundamentally different.
Berkshire owns:
- insurance
- railroads
- utilities
- manufacturing
- consumer businesses
- large cash reserves
Examples include:
- BNSF Railway
- GEICO
- Berkshire Hathaway Energy
Those are excellent businesses, but they are:
- capital intensive
- slower growth
- regulated
- tied to GDP growth
Also:
Berkshire became too large
This is extremely important.
When Buffett managed small capital in the 1960s–1980s:
- he could buy small undervalued companies
- special situations mattered
- arbitrage opportunities moved returns
Today Berkshire is near trillion-dollar scale.
That creates a mathematical problem:
A company that large cannot compound at 20% forever because:
- there are not enough large opportunities
- acquisitions move the needle less
- cash drag becomes enormous
Buffett himself has repeatedly said size is Berkshire’s enemy.
That’s why Berkshire’s:
- volatility stayed lower
- drawdowns stayed smaller
- returns converged closer to SPY over time
rather than matching QQQ/VGT.
4. Risk-adjusted comparison
This is where the story becomes more nuanced.
During crashes
BRK.B often holds up much better.
Examples:
- 2022 tech crash
- dot-com collapse
- rising-rate periods
QQQ/VGT can drop:
- 30–50%
- because long-duration growth stocks are highly sensitive to interest rates
Berkshire’s businesses:
- generate real cash flow
- often benefit from inflation
- have insurance float
- hold huge liquidity reserves
So Berkshire historically had:
- smaller drawdowns
- lower volatility
- more defensive behavior
Example comparisons show BRK.B drawdowns materially smaller than QQQ.
5. The hidden macro reason
The last 15 years were probably the greatest environment ever for:
- long-duration growth assets
- software monopolies
- tech platform scalability
Key conditions:
- near-zero interest rates
- globalization
- cloud adoption
- smartphones
- AI
- cheap capital
That disproportionately favored:
- VGT
- QQQ
If future decades become:
- inflationary
- energy constrained
- higher-rate
- infrastructure-heavy
then:
- SPY or BRK.B may relatively improve
- while tech multiples compress
Simplified intuition
Think of them like this:
| Asset | Analogy |
|---|---|
| VGT | Leveraged bet on the digital economy |
| QQQ | Growth-oriented innovation engine |
| SPY | The entire US corporate economy |
| BRK.B | Giant actively managed value/quality conglomerate |
If you had invested $10k roughly 15–20 years ago
Approximate outcome:
| Asset | Approx Ending Value |
|---|---|
| VGT | Highest |
| QQQ | Very high |
| SPY | Strong |
| BRK.B | Good but no longer extraordinary |
QQQ total return since 2010 exceeded 1600% in some comparisons, while BRK.B was closer to ~500–700%.
