VGTvs XLK

Quick verdict

Vanguard Information Technology ETF (VGT) and Technology Select Sector SPDR Fund (XLK) are often compared by investors building a core portfolio. Their holdings overlap by roughly 38.7% (moderate overlap), sharing 8 of their top positions. XLK is cheaper at 0.10% vs 0.09%, XLK pays more income, and XLK has the stronger recent track record. On balance XLK scores higher, but if overlap is high you likely only need one of the two.

Holdings overlap

VGT and XLK overlap by about 38.7% across their largest holdings, which is moderate. There is meaningful shared exposure but also genuine differences, so pairing them is defensible if you want a tilt.

2-year relative performance

At-a-glance comparison

Cost

XLK is the lower-cost fund. VGT charges an expense ratio of 0.10% versus 0.09% for XLK. On a $10,000 position that is about $10 vs $9 per year — small, but it compounds over decades.

Income & yield

VGT yields 0.6% and XLK yields 0.7%, so XLK is the stronger choice for income-focused investors. Higher yield can reflect a value or covered-call strategy rather than simply "more free money," so check the category: US Technology vs US Technology.

Performance

Over five years VGT has returned 16.4% annualised against 16.7% for XLK; on a three-year basis it is -0.0% vs 14.6%. XLK leads recently, though past performance does not predict future results and is heavily influenced by sector weightings.

Structure & diversification

VGT holds about 410 positions (US Technology, Vanguard); XLK holds about 72 (US Technology, State Street). VGT is the more diversified by raw holding count, and AUM is 94.5B vs 144.7B — larger funds tend to be more liquid with tighter spreads.

Which ETF fits which investor

For the lowest cost, choose XLK. For the most income, XLK. For growth exposure, XLK. Given 38.7% overlap, holding both mainly makes sense if you specifically want to tilt toward one strategy — otherwise pick the single fund that matches your goal. This is a factual comparison, not advice.

• Lowest cost: XLK
• Most income: XLK
• Growth exposure: XLK

Frequently asked questions

How much do VGT and XLK overlap?

Their largest holdings overlap by approximately 38.7% (moderate), sharing 8 top positions. There is room for both to add diversification.

Which is cheaper, VGT or XLK?

XLK is cheaper, with an expense ratio of 0.09% versus 0.10%.

Which has the higher dividend yield?

VGT yields 0.6% and XLK yields 0.7%, so XLK pays more income.

Should I own both VGT and XLK?

With 38.7% overlap, owning both can be reasonable if you want to combine their different exposures.

Related ETF comparisons

• QQQ vs VGT