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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 State Street Technology Select Sector SPDR ETF covering yield, cost, risk, and income potential.

Data updated August 19, 2026

Best for

  • VGTInvestors who want broad equity exposure.
  • XLKInvestors who want broad equity exposure.

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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 35.97% total return against 38.66%. The picture flips over 10 years, though — VGT has compounded at 24.36% a year, ahead of XLK at 24.12%. Figures are total returns: price change plus every distribution reinvested.

Total return and risk statistics by fund. Each row is one fund; each column is one period or statistic.
SymbolYTD1Y3Y5Y10YSince Jan 2004Volatility Sharpe Sortino Max drawdown
VGT26.00%35.97%31.57%19.20%24.36%15.02%24.6%0.941.34-27.2%
XLK27.57%38.66%30.67%20.14%24.12%14.92%25.0%0.891.27-25.7%

Total return with all distributions reinvested on the ex-dividend date, split-adjusted, as of August 19, 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.

Side-by-side snapshot

Side-by-side snapshot. Each row is one metric; each column is one fund.
MetricVGTXLK
Full nameVanguard Information Technology ETFState Street Technology Select Sector SPDR ETF
IssuerVanguardState Street
Last Close$119.79 as of August 19, 2026$185.62 as of August 19, 2026
Distribution yield0.46%0.49%
Distribution Safety Score™ 9399
Expense ratio0.09%0.08%
AUM$151B$124B
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
Beta1.471.47
Last dividend$0.1384$0.2280
Ex-dividend date06/24/202606/22/2026

Bottom lineVGT and XLK are both for investors who want broad equity exposure — so strategy isn't the deciding factor here. Fees and payouts are close too, so it comes down to which your broker offers commission-free and any share-price or tax-lot preference.

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See how much monthly income a hypothetical investment would generate in each ETF at current yields.

Vanguard
ETFs116
Total AUM$4703B

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

Vanguard is one of the largest and most established ETF issuers, known for low-cost, broadly diversified fund offerings built on passive indexing principles. Their lineup spans multiple asset classes and strategies, including core equity and bond index funds, dividend-focused portfolios, ESG-screened options, factor-based strategies, sector exposure, target-date retirement funds, and international investments across developed and emerging markets. The platform is characterized by its emphasis on accessibility and cost efficiency across a comprehensive range of fund families, serving both individual investors seeking broad market exposure and those pursuing specific income, sustainability, or thematic objectives.

See our curated list of related YouTube videos on VGT.

See all Vanguard ETFs
State Street
ETFs180
Total AUM$2169B

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

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Quick verdict

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

XLK offers the higher yield at 0.49% vs 0.46% 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 0.08% compared to 0.09%.

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 ($151B), which generally means tighter spreads and better liquidity.

Deep dive

Yield & income

On a $10,000 investment, VGT would generate roughly $3.83/month, while XLK would produce $4.08/month, at current distribution rates. Both pay quarterly distributions.

VGT yield0.46%
XLK yield0.49%
Monthly diff on $10K$0.25

Cost & efficiency

Over 10 years on $10,000, VGT would cost approximately $90 in fees vs $80 for XLK (simplified, not compounded). The $10.00 difference may be offset by yield or performance.

VGT ER0.09%
XLK ER0.08%

Strategy & risk

VGT holds a basket of Vanguard Information Technology ETF holdings, while XLK tracks Technology Select Sector Index with a technology approach.

VGT beta1.47
XLK beta1.47

Fund details

VGT is managed by Vanguard (launched 01/26/2004) with $151B in assets. XLK is managed by State Street (launched 12/16/1998) with $124B in assets.

VGT AUM$151B
XLK AUM$124B
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Frequently asked questions

What is the current distribution yield for VGT and XLK?

VGT currently distributes 0.46% and XLK 0.49%, based on fund data updated August 2026. Distribution yield moves with both the payout and the share price, so check the as-of date before relying on either figure.

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 (State Street Technology Select Sector SPDR ETF) 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.

Is VGT or XLK safer?

By Dividend Vision's Distribution Safety Score — a rules-based 0–100 estimate of how resilient a distribution looks, where higher is safer — XLK scores 99, VGT scores 93, so XLK's payout currently looks the more resilient of the two. No score makes an investment risk-free — treat this as a screening signal, not a guarantee.

Which has lower fees, VGT or XLK?

VGT has an expense ratio of 0.09% while XLK charges 0.08%. 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 $3.83 per month ($46.00 annually). The same in XLK would produce about $4.08 per month ($49.00 annually).

Which has performed better historically, VGT or XLK?

VGT has lagged XLK over the trailing twelve months, posting a 35.97% total return against 38.66%. The picture flips over 10 years, though — VGT has compounded at 24.36% a year, ahead of XLK at 24.12%. 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 August 15, 2026.

Figures quoted in this analysis are from its generation date and may lag the live snapshot table above, which always shows the latest data.

Overview

VGT and XLK are both U.S. technology equity ETFs offering broad sector exposure through different index methodologies. VGT tracks the MSCI US Investable Market Index (covering large, mid, and small-cap tech stocks), while XLK tracks the S&P 500 Technology Select Sector Index (large-cap tech only). The key distinction: VGT includes mid and small-cap tech companies; XLK focuses exclusively on the largest tech names in the S&P 500.

How they differ

VGT's index includes mid and small-cap technology companies alongside large-caps, while XLK is confined to large-cap tech constituents of the S&P 500. This means VGT has broader exposure to the tech sector; XLK concentrates on mega-cap names that dominate sector market value. Both offer nearly identical yields (0.45% for VGT, 0.48% for XLK) and expense ratios (0.10% for VGT, 0.09% for XLK), with quarterly distributions. VGT is larger by AUM ($147B vs. $123B) and slightly newer (inception January 2004 vs. December 1998 for XLK). Both carry a beta of 1.47, suggesting comparable sensitivity to broad market moves, though that beta masks structural differences in their underlying holdings.

Who each is best for

VGT: Fits investors seeking broader exposure to the U.S. technology sector, including mid and small-cap growth opportunities that may not appear in large-cap-only indexes.

XLK: Designed for investors who want concentrated exposure to the largest, most-established technology companies within the S&P 500 framework, with higher weighting on mega-cap leaders.

Key risks to know

  • Concentration in mega-cap names: Both ETFs are heavily weighted toward the largest technology companies. XLK's large-cap-only mandate amplifies this risk; sector-wide downturns in mega-cap tech will drive losses in both funds proportionally, with XLK bearing greater pressure from individual stock moves among the largest constituents.
  • High beta relative to the broader market: At a beta of 1.47, both ETFs are more volatile than the overall stock market. Tech sector corrections typically accelerate downside moves in these vehicles compared to diversified equity indexes.
  • Sector concentration risk: Neither fund provides technology diversification across other sectors. A prolonged rotation away from tech into defensive or cyclical areas will pressure both equally, though XLK's concentration may amplify sector-level weakness.
  • Earnings and valuation sensitivity: Technology stocks are often valued on forward earnings and growth expectations rather than current dividend yields. Both funds' modest yields (under 0.50%) mean investors are primarily exposed to capital appreciation risk; multiple compression can drive significant NAV declines regardless of underlying earnings quality.

Bottom line

If you want broader exposure across the tech sector including mid and small-cap growth names, VGT's MSCI-based approach expands the opportunity set; if you prefer concentrated exposure to the largest, most-liquid S&P 500 tech names, XLK's focused large-cap mandate may appeal. Both are low-cost, high-beta plays on the technology sector with minimal yield — the choice hinges on whether you value breadth or concentration within tech. Past performance does not guarantee future results.

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

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