VDIGX vs XLK
Vanguard Dividend Growth Fund Investor Class vs State Street Technology Select Sector SPDR ETF
Quick Verdict
XLK has a lower expense ratio. XLK delivered stronger 1-year returns. XLK offers more diversification with 77 holdings.
Side-by-Side Comparison
| Metric | VDIGX | XLK | Winner |
|---|---|---|---|
| Expense Ratio | 0.20% | 0.08% | |
| AUM | $35.5B | $124.4B | |
| Dividend Yield | 23.36% | 0.45% | |
| Holdings | 55 | 77 | |
| YTD Return | -0.73% | +32.00% | |
| 1Y Return | -10.80% | +42.69% | |
| 3Y Return (annualized) | -3.02% | +32.19% | |
| 5Y Return (annualized) | -3.20% | +20.47% | |
| Volatility (annualized) | 16.1% | 23.2% | |
| Max Drawdown | -32.6% | -82.0% | |
| Fund Family | Vanguard (US) | SPDR State Street Global Advisors | |
| Category | Equity | Equity | |
| Inception | May 15, 1992 | Dec 16, 1998 |
VDIGX vs XLK Performance
Vanguard Dividend Growth Fund Investor Class (VDIGX) is a mutual fund from Vanguard (US) and State Street Technology Select Sector SPDR ETF (XLK) is a ETF from SPDR State Street Global Advisors. Over the past year VDIGX returned -10.80% while XLK returned +42.69%. Year to date, VDIGX is down 0.73% versus a gain of 32.00% for XLK.
Over three years, VDIGX compounded at -3.02% per year against +32.19% for XLK; over five years the annualized figures are -3.20% and +20.47% respectively. Across the full 5-year window we track, XLK has the edge at +9.52% annualized vs -3.20%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
XLK has been the more volatile fund, with annualized monthly volatility of 23.2% compared with 16.1% for VDIGX. Lower volatility generally means a smoother ride, though it often comes with lower long-run returns.
The deepest peak-to-trough decline in our data was -32.6% for VDIGX and -82.0% for XLK. Drawdown depth is worth weighing if you expect to sell during market stress rather than ride it out.
The two funds' monthly returns correlate at 0.57. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
VDIGX charges 0.20% per year while XLK charges 0.08%. On a $10,000 position that is $20 vs $8 annually, a gap of $12 per year that compounds over a long holding period. On income, VDIGX currently yields 23.36% against 0.45% for XLK.
Holdings Overlap
VDIGX and XLK share 7 holdings out of 115 unique holdings combined, representing a 17.8% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, VDIGX or XLK?
VDIGX has an expense ratio of 0.20% while XLK charges 0.08%. XLK is the cheaper option. On a $10,000 investment, that is $12 per year of difference.
Which performed better, VDIGX or XLK?
Over the past year VDIGX returned -10.80% vs +42.69% for XLK, so XLK leads on 1-year performance. Over the longest common window we track (5 years), VDIGX annualized -3.20% vs +9.52% for XLK. Past performance does not guarantee future results.
Which is riskier, VDIGX or XLK?
XLK has been the more volatile fund at 23.2% annualized versus 16.1% for VDIGX. Worst drawdown: VDIGX -32.6% vs XLK -82.0%.
Should I hold both VDIGX and XLK?
VDIGX and XLK have a monthly-return correlation of 0.57, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VDIGX and XLK?
VDIGX and XLK share 7 common holdings with a 17.8% weight overlap. Combined, they hold 115 unique securities.
Which pays a higher dividend, VDIGX or XLK?
VDIGX yields 23.36% while XLK yields 0.45%, so VDIGX currently pays the higher dividend yield.
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