VGT vs XLK
Vanguard Information Technology ETF vs State Street Technology Select Sector SPDR ETF
Quick Verdict
XLK has a lower expense ratio. XLK delivered stronger 1-year returns. VGT offers more diversification with 324 holdings.
Side-by-Side Comparison
| Metric | VGT | XLK | Winner |
|---|---|---|---|
| Expense Ratio | 0.09% | 0.08% | |
| AUM | $138.8B | $124.4B | |
| Dividend Yield | 0.38% | 0.45% | |
| Holdings | 324 | 77 | |
| YTD Return | +29.30% | +31.02% | |
| 1Y Return | +39.76% | +43.39% | |
| 3Y Return (annualized) | +32.12% | +31.30% | |
| 5Y Return (annualized) | +18.85% | +19.91% | |
| Volatility (annualized) | 19.6% | 23.2% | |
| Max Drawdown | -54.8% | -82.0% | |
| Fund Family | Vanguard (US) | SPDR State Street Global Advisors | |
| Category | Equity | Equity | |
| Inception | Jan 26, 2004 | Dec 16, 1998 |
VGT vs XLK Performance
Vanguard Information Technology ETF (VGT) is a ETF 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 VGT returned +39.76% while XLK returned +43.39%. Year to date, VGT is up 29.30% versus a gain of 31.02% for XLK.
Over three years, VGT compounded at +32.12% per year against +31.30% for XLK; over five years the annualized figures are +18.85% and +19.91% respectively. Across the full 23-year window we track, VGT has the edge at +14.34% annualized vs +9.48%. 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 19.6% for VGT. 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 -54.8% for VGT 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 0.99. They move almost in lockstep, so holding both mostly duplicates the same exposure.
Fees and Cost Over Time
VGT charges 0.09% per year while XLK charges 0.08%. On a $10,000 position that is $9 vs $8 annually, a gap of $1 per year that compounds over a long holding period. On income, VGT currently yields 0.38% against 0.45% for XLK.
Holdings Overlap
VGT and XLK share 72 holdings out of 325 unique holdings combined, representing a 79.7% weight overlap.
High overlap means holding both may not provide much additional diversification.
Frequently Asked Questions
Which is cheaper, VGT or XLK?
VGT has an expense ratio of 0.09% while XLK charges 0.08%. XLK is the cheaper option. On a $10,000 investment, that is $1 per year of difference.
Which performed better, VGT or XLK?
Over the past year VGT returned +39.76% vs +43.39% for XLK, so XLK leads on 1-year performance. Over the longest common window we track (23 years), VGT annualized +14.34% vs +9.48% for XLK. Past performance does not guarantee future results.
Which is riskier, VGT or XLK?
XLK has been the more volatile fund at 23.2% annualized versus 19.6% for VGT. Worst drawdown: VGT -54.8% vs XLK -82.0%.
Should I hold both VGT and XLK?
VGT and XLK have a monthly-return correlation of 0.99, so they move almost identically. Holding both adds little diversification - most investors pick one, usually on fees or the specific index tracked.
What is the holdings overlap between VGT and XLK?
VGT and XLK share 72 common holdings with a 79.7% weight overlap. Combined, they hold 325 unique securities.
Which pays a higher dividend, VGT or XLK?
VGT yields 0.38% while XLK yields 0.45%, so XLK currently pays the higher dividend yield.
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