Battle of the Tech ETFs: How VGT and IYW Compare on Performance, Fees, and Diversification

Core Insights - The Vanguard Information Technology ETF (VGT) and the iShares US Technology ETF (IYW) are both designed for investors seeking exposure to leading technology companies, but they differ in cost, diversification, and performance [2] Cost & Size - IYW has an expense ratio of 0.38% and assets under management (AUM) of $21 billion, while VGT has a lower expense ratio of 0.09% and AUM of $130 billion [3] - The one-year return for IYW is 23.99%, compared to VGT's 20.12%, and VGT offers a higher dividend yield of 0.41% versus IYW's 0.14% [3][4] Performance & Risk Comparison - Over five years, IYW has a maximum drawdown of -39.44% compared to VGT's -35.08%, and $1,000 invested in IYW would grow to $2,347, while the same investment in VGT would grow to $2,133 [5] Holdings & Diversification - VGT holds 322 stocks, primarily mega-cap companies like Nvidia, Apple, and Microsoft, providing diversified exposure to the tech industry [6] - IYW is narrower with 141 stocks, having similar top holdings but with smaller portions compared to VGT [7] Investment Implications - VGT's lower expense ratio and higher yield may attract cost-conscious investors, while IYW has shown stronger five-year growth but with higher volatility [9] - Both ETFs have similar total returns over the last 12 months and five years, but VGT offers greater diversification with nearly 200 more holdings than IYW [10][11]