FTEC vs. VGT: Which of These Popular Tech ETFs Is the Better Buy for Investors?

Core Viewpoint - The Vanguard Information Technology ETF (VGT) and the Fidelity MSCI Information Technology Index ETF (FTEC) are designed to replicate the U.S. information technology market, with key differentiators being cost, liquidity, and fund size [1]. Cost & Size - VGT has an expense ratio of 0.09% while FTEC has a slightly lower expense ratio of 0.08% [2]. - As of January 26, 2026, VGT's one-year return is 18.80% compared to FTEC's 19.14% [2]. - VGT has a dividend yield of 0.40% and FTEC has a yield of 0.43% [2]. - VGT's assets under management (AUM) stand at $130 billion, significantly larger than FTEC's $17 billion [2]. Performance & Risk Comparison - The maximum drawdown over five years for VGT is -35.08%, while FTEC's is -34.95% [4]. - An investment of $1,000 would grow to $2,076 in VGT and $2,097 in FTEC over five years [4]. Portfolio Composition - FTEC provides exposure to nearly 300 U.S. tech stocks, with a sector allocation of 98% technology [5]. - VGT holds approximately 320 stocks, indicating a slightly broader diversification while maintaining a tech-heavy focus [6]. - Both funds have similar top holdings, including Nvidia, Microsoft, and Apple, with FTEC's top three stocks making up 44.42% of assets and VGT's at 44.57% [7]. Investment Implications - The minimal differences in expense ratios and dividend yields may influence investor decisions between the two funds [8]. - VGT's larger number of stocks offers marginally more diversification, but this has not significantly impacted performance or risk profiles [8]. - VGT's larger AUM provides greater liquidity, allowing for larger transactions without affecting the ETF's price [9].