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ETF Comparison

VGT vs XLK: Which Is the Better Pick in 2026?

A head-to-head comparison of Vanguard Information Technology ETF and Technology Select Sector SPDR Fund covering yield, cost, risk, and income potential.

Data updated July 21, 2026

Vanguard
ETFs116
Total AUM$4488B

ETFs and AUM reflect what Dividend Vision tracks — the issuer's full lineup may be larger.

Vanguard is known for offering low-cost, passively managed ETFs that emphasize broad market exposure and long-term investing. The company operates 175 ETFs across diverse fund families including Index, Bond, Equity, Dividend, Income, International, Factor, and ESG strategies, serving investors with various goals from core portfolio building to specialized income generation. Notable for its scale and popular tickers like VB (total U.S. small-cap), BND (total bond market), and VBIAX (international bonds), Vanguard focuses on providing comprehensive, index-based investment solutions with an emphasis on cost efficiency and accessibility.

See our curated list of related YouTube videos on VGT.

See all Vanguard ETFs
State Street
ETFs178
Total AUM$2025B

ETFs and AUM reflect what Dividend Vision tracks — the issuer's full lineup may be larger.

State Street Global Advisors (SSGA) is one of the largest ETF providers globally, known for its flagship SPDR suite of exchange-traded products that serve both institutional and retail investors across a broad range of asset classes. Their 88-fund lineup spans diverse strategies including sector exposure (Select Sector SPDR), income generation (Income and Select Sector SPDR Premium Income families), commodities (including the widely-held GLD gold ETF), bonds, ESG-focused investments, and thematic allocations, with popular tickers like DIA (Diamonds Trust), FEZ (Eurozone exposure), and JNK (high-yield bonds) among their most recognized funds. The issuer is characterized by its comprehensive coverage across multiple market segments and its emphasis on both traditional index-based products and specialized strategies like covered call income funds and factor-based investing.

See our curated list of related YouTube videos on XLK.

See all State Street ETFs

Side-by-side snapshot

VGTXLK
Full nameVanguard Information Technology ETFTechnology Select Sector SPDR Fund
IssuerVanguardState Street
Last Close$113.23 as of July 21, 2026$175.71 as of July 21, 2026
Distribution yield0.49%0.52%
Distribution Safety Score™ 89100
Expense ratio0.10%0.09%
AUM$139B$115B
Distribution frequencyQuarterlyQuarterly
Underlying indexa basket of Vanguard Information Technology ETF holdingsTechnology Select Sector Index
ObjectiveSeeks to track the performance of the MSCI US Investable Market Index/Information Technology 25/50, an index made up of stocks of large, mid-size, and small U.S. companies within the information technology sector, including technology software and services, hardware and equipment, and semiconductor manufacturers.Track the Technology Select Sector Index, providing exposure to the information technology constituents of the S&P 500.
Asset classEquityEquity
Inception date01/26/200412/16/1998
Beta1.441.43
Last dividend$0.1384$0.2280
Ex-dividend date06/24/202609/21/2026

Bottom lineVGT and XLK are nearly interchangeable — both offer very similar derivative overlay exposure with very similar cost and risk. The clearest tie-breaker is cost: XLK is cheaper at 0.09% vs 0.10%.

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Visual comparison

Key metrics

Projected income on $10K

Projections assume the current yield and share price remain constant. Actual results will vary.

Total returns

VGT has lagged XLK over the trailing twelve months, posting a 32.53% total return against 35.23%. The picture flips over 10 years, though — VGT has compounded at 24.34% a year, ahead of XLK at 24.05%. Figures are total returns: price change plus every distribution reinvested.

SymbolYTD1Y3Y5Y10YSince Jan 2004Volatility Sharpe Sortino Max drawdown
VGT20.09%32.53%27.10%18.69%24.34%14.83%24.3%0.811.14-27.2%
XLK22.06%35.23%26.70%19.73%24.05%14.76%24.6%0.791.10-25.7%

Total return with all distributions reinvested on the ex-dividend date, split-adjusted, as of July 20, 2026. YTD and 1Y are cumulative; longer windows are annualized. “Since Jan 2004” measures every fund from January 30, 2004 — the youngest fund's first trading day — so all funds share one comparison window. Volatility is the annualized standard deviation of daily total returns over the trailing 3 years. Sharpe and Sortino divide the annualized return in excess of the risk-free rate by, respectively, that volatility and the downside deviation (both over the trailing 3 years) — higher is better. Max drawdown is the largest peak-to-trough total-return decline over the same window — shallower is better.

Quick verdict

VGT (Vanguard Information Technology ETF) and XLK (Technology Select Sector SPDR Fund) are both quarterly-pay dividend ETFs, but they take different approaches.

XLK offers the higher yield at 0.52% vs 0.49% for VGT. A higher yield means more current income per dollar invested, though it may come with different risk characteristics.

XLK is cheaper with an expense ratio of 0.09% compared to 0.10%.

They track different benchmarks: VGT is linked to a basket of Vanguard Information Technology ETF holdings while XLK tracks Technology Select Sector Index, which means their performance drivers differ.

VGT is the larger fund by assets ($139B), which generally means tighter spreads and better liquidity.

Deep dive

Yield & income

On a $10,000 investment, VGT would generate roughly $4.08/month, while XLK would produce $4.33/month, at current distribution rates. Both pay quarterly distributions.

VGT yield0.49%
XLK yield0.52%
Monthly diff on $10K$0.25

Cost & efficiency

Over 10 years on $10,000, VGT would cost approximately $100 in fees vs $90 for XLK (simplified, not compounded). The $10.00 difference may be offset by yield or performance.

VGT ER0.10%
XLK ER0.09%

Strategy & risk

VGT holds a basket of Vanguard Information Technology ETF holdings, while XLK tracks Technology Select Sector Index with a technology approach. Beta is 1.44 for VGT and 1.43 for XLK, indicating XLK is less volatile relative to the market.

VGT beta1.44
XLK beta1.43

Fund details

VGT is managed by Vanguard (launched 01/26/2004) with $139B in assets. XLK is managed by State Street (launched 12/16/1998) with $115B in assets.

VGT AUM$139B
XLK AUM$115B
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Frequently asked questions

Is VGT or XLK better for dividend income?

It depends on your goals. XLK currently offers the higher distribution yield, which means more income per dollar invested. However, a lower-yield fund may offer better total return or lower volatility. Consider your time horizon and risk tolerance.

What is the difference between VGT and XLK?

VGT (Vanguard Information Technology ETF) holds a basket of Vanguard Information Technology ETF holdings, while XLK (Technology Select Sector SPDR Fund) tracks Technology Select Sector Index with a technology approach. They are issued by Vanguard and State Street respectively.

Can I hold both VGT and XLK?

Yes — nothing prevents holding both. Whether the combination actually diversifies depends on how much the underlying exposures overlap, which isn't fully measurable from the data on this page; review each security's holdings, sector, and strategy before treating them as complementary.

Which has lower fees, VGT or XLK?

VGT has an expense ratio of 0.10% while XLK charges 0.09%. Lower fees mean more of your investment returns stay in your pocket over time.

How much income does $10,000 in VGT vs XLK generate?

At current rates, $10,000 in VGT would generate roughly $4.08 per month ($49.00 annually). The same in XLK would produce about $4.33 per month ($52.00 annually).

Which has performed better historically, VGT or XLK?

VGT has lagged XLK over the trailing twelve months, posting a 32.53% total return against 35.23%. The picture flips over 10 years, though — VGT has compounded at 24.34% a year, ahead of XLK at 24.05%. Figures are total returns: price change plus every distribution reinvested. Past performance does not guarantee future results.

More comparisons to explore

VGT vs XLK — at a glance

Generated July 2026 from current fund data.

Overview

VGT and XLK are both tech-sector ETFs that track U.S. information technology companies, but they differ in breadth and index construction. VGT holds large-, mid-, and small-cap tech stocks across the MSCI US Investable Market Index framework, while XLK is limited to the large-cap tech constituents of the S&P 500. The result is a meaningful difference in portfolio composition and exposure intensity.

How they differ

XLK's narrower S&P 500 tech universe produces tighter concentration than VGT's broader MSCI approach—the largest difference between them. VGT's beta of 1.44 versus XLK's 1.43 reflects that marginal variation, but the real gap is in market-cap span: VGT includes mid- and small-cap tech exposure that XLK excludes, giving it higher growth potential but also greater volatility within the sector. On cost, XLK edges ahead with a 0.09% expense ratio to VGT's 0.10%, and XLK holds a $118B asset base versus VGT's $143B—both are massive, so fee pressure should remain minimal for either. Distribution yields are nearly identical: VGT at 0.47% and XLK at 0.49%, both paid quarterly.

Who each is best for

VGT: Investors seeking broad-based U.S. tech exposure that captures mid- and small-cap innovation alongside mega-cap leaders, particularly those comfortable with the added volatility that smaller holdings entail.

XLK: Investors who prefer their tech allocation anchored to S&P 500 constituents and want the most streamlined, lowest-cost entry to large-cap tech leadership.

Key risks to know

  • Index concentration risk. Both funds face meaningful single-sector concentration—technology's dominance in recent years means both portfolios are heavily weighted to a handful of mega-cap names. A rotation out of tech would compress both NAVs proportionally.
  • Small-cap and mid-cap beta in VGT. VGT's inclusion of mid- and small-cap tech stocks amplifies drawdown risk relative to XLK during risk-off environments. Smaller tech firms face higher funding costs and carry more execution risk when growth investors flee to safety.
  • S&P 500 index lock-in with XLK. XLK's exclusive S&P 500 tech exposure means it misses promising tech companies below that threshold. If a large emerging software or semiconductor company remains private longer or trades on a different index, XLK won't capture that upside, whereas VGT may.
  • Sector momentum and valuation. Both track pure-play tech, so they move in lockstep with tech sentiment. Unlike diversified broad-market funds, neither offers offset from defensive or cyclical holdings when the sector falls out of favor.

Bottom line

If you want maximum breadth in U.S. tech and accept the volatility of smaller holdings, VGT's larger asset pool and mid/small-cap coverage appeal; if you prefer a leaner, S&P 500–bound approach with a marginally lower expense ratio, XLK delivers that with equally simple quarterly distributions. Both are core-compatible vehicles for tech allocation—the choice hinges on whether you value small-cap capture or S&P 500 purity. Past performance does not predict future results.

AI-generated analysis for educational purposes only. Verify important details independently; past performance does not guarantee future results.

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