The Vanguard Information Technology ETF (VGT) Offers Broader Tech Diversification Than the Technology Select Sector SPDR Fund (XLK)

Core Insights - The Vanguard Information Technology ETF (VGT) and the Technology Select Sector SPDR Fund (XLK) are compared for their performance, diversification, cost, and risk metrics [1] Cost & Size - XLK has a lower expense ratio of 0.08% compared to VGT's 0.09% [2][3] - As of October 27, 2025, XLK's one-year return is 29.9%, while VGT's is 30.6% [2] - XLK offers a dividend yield of 0.5%, slightly higher than VGT's 0.4% [3] - XLK has an AUM of $96.4 billion, while VGT has $128.3 billion [2] Performance & Risk Comparison - Over five years, XLK has a max drawdown of 33.56%, while VGT's is 35.08% [4] - A $1,000 investment in XLK would grow to $2,681 over five years, compared to $2,621 for VGT [4] Holdings & Diversification - VGT holds approximately 310 stocks, primarily in technology, with a small 1% in communication services [5] - XLK is more concentrated with only 68 holdings, focusing exclusively on technology [6] - Both funds have significant investments in NVIDIA, Apple, and Microsoft, but with different weightings [6] Historical Performance - Over the past five years, XLK has delivered a total return of 181.8%, while VGT has produced a total return of 174.3% [7] Index Tracking - VGT tracks the MSCI U.S. Investable Market Information Technology 25/50 index, which includes large, medium, and small U.S. tech companies [8] - XLK tracks technology stocks limited to those in the S&P 500 index [8]