VTCIX vs XLK
Vanguard Tax-Managed Capital Appreciation Fund Institutional Shares vs State Street Technology Select Sector SPDR ETF
Quick Verdict
VTCIX has a lower expense ratio. XLK delivered stronger 1-year returns. VTCIX offers more diversification with 836 holdings.
Side-by-Side Comparison
| Metric | VTCIX | XLK | Winner |
|---|---|---|---|
| Expense Ratio | 0.03% | 0.08% | |
| AUM | $5.2B | $124.4B | |
| Dividend Yield | 0.93% | 0.45% | |
| Holdings | 836 | 77 | |
| YTD Return | +11.73% | +26.25% | |
| 1Y Return | +18.91% | +39.55% | |
| 3Y Return (annualized) | +20.07% | +29.74% | |
| 5Y Return (annualized) | +10.95% | +19.10% | |
| Volatility (annualized) | 16.1% | 23.2% | |
| Max Drawdown | -26.0% | -82.0% | |
| Fund Family | Vanguard (US) | SPDR State Street Global Advisors | |
| Category | Equity | Equity | |
| Inception | Feb 24, 1999 | Dec 16, 1998 |
VTCIX vs XLK Performance
Vanguard Tax-Managed Capital Appreciation Fund Institutional Shares (VTCIX) 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 VTCIX returned +18.91% while XLK returned +39.55%. Year to date, VTCIX is up 11.73% versus a gain of 26.25% for XLK.
Over three years, VTCIX compounded at +20.07% per year against +29.74% for XLK; over five years the annualized figures are +10.95% and +19.10% respectively. Across the full 5-year window we track, VTCIX has the edge at +10.95% annualized vs +9.34%. 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 VTCIX. 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 -26.0% for VTCIX 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 0.87. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
VTCIX charges 0.03% per year while XLK charges 0.08%. On a $10,000 position that is $3 vs $8 annually, a gap of $5 per year that compounds over a long holding period. On income, VTCIX currently yields 0.93% against 0.45% for XLK.
Holdings Overlap
VTCIX and XLK share 67 holdings out of 833 unique holdings combined, representing a 30.2% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, VTCIX or XLK?
VTCIX has an expense ratio of 0.03% while XLK charges 0.08%. VTCIX is the cheaper option. On a $10,000 investment, that is $5 per year of difference.
Which performed better, VTCIX or XLK?
Over the past year VTCIX returned +18.91% vs +39.55% for XLK, so XLK leads on 1-year performance. Over the longest common window we track (5 years), VTCIX annualized +10.95% vs +9.34% for XLK. Past performance does not guarantee future results.
Which is riskier, VTCIX or XLK?
XLK has been the more volatile fund at 23.2% annualized versus 16.1% for VTCIX. Worst drawdown: VTCIX -26.0% vs XLK -82.0%.
Should I hold both VTCIX and XLK?
VTCIX and XLK have a monthly-return correlation of 0.87, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VTCIX and XLK?
VTCIX and XLK share 67 common holdings with a 30.2% weight overlap. Combined, they hold 833 unique securities.
Which pays a higher dividend, VTCIX or XLK?
VTCIX yields 0.93% while XLK yields 0.45%, so VTCIX currently pays the higher dividend yield.
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