XLK is the better choice unless you want VGT's smaller companies or more Nvidia
Counting each shared stock at the lighter of its two weights, 83.3% of each fund is the same portfolio, and the return gap belongs to the indexes.
Key takeaways
State Street Technology Select Sector SPDR ETF XLK is the better choice. Vanguard Information Technology ETF VGT holds every stock XLK holds, plus smaller companies that are 10.6% of VGT. Take VGT only if you want those companies, or the heavier Nvidia weight, 17.6% of VGT against 13.2% of XLK in the holdings files available on Nov. 11.
That weight is not a neutral preference this week. Nvidia announced on Thursday, Nov. 12, that its chief executive, Jensen Huang, had resigned. The stock opened 13.1% lower and closed down 4.3%, at $166.19. VGT fell 0.55% that day and XLK 0.34%.
The fee will not decide it. XLK charges 0.08%. VGT charges 0.09%. On $10,000, the difference is $1 a year.
Over the year through Oct. 31, State Street reported a 20.04% return for XLK and Vanguard reported 18.51% for VGT. XLK's index returned 20.13%. VGT's index returned 18.61%.
The funds were 1.53 percentage points apart. The indexes were 1.52 percentage points apart. The gap belongs to the indexes, not to either fund.
What VGT and XLK hold
XLK tracks the Technology Select Sector Index, the information technology companies in the S&P 500, the main index of large US stocks. VGT tracks the MSCI US Investable Market Information Technology 25/50 Index, which adds smaller US technology companies.
In the holdings files available on Nov. 11, 76 companies sit in both funds. Counted at the lighter of the two weights, those shared stocks are 83.3% of each fund. The 241 companies only VGT holds are 10.6% of that fund.
Adding 83.3% and 10.6% does not reach 100%. VGT holds some of the shared stocks more heavily than XLK does, and that extra weight is the rest of the fund.
Apple is 15.9% of VGT and 16.4% of XLK. Microsoft is 11.2% of VGT and 12.8% of XLK.
Nvidia is heavier in VGT; Apple and Microsoft in XLK
- VGT
- XLK
- NVDA
- VGT 17.6%
- XLK 13.2%
- AAPL
- VGT 15.9%
- XLK 16.4%
- MSFT
- VGT 11.2%
- XLK 12.8%
The ten largest holdings are 63.6% of VGT and 64.8% of XLK.
How VGT and XLK have returned
These are average annual total returns through Oct. 31, 2026, dividends included, as each firm reports them for the fund rather than the share price. The one-year column is the return for that year. Oct. 31 is the latest month both firms have published for the fund and the index together.
Over 10 years, VGT returned 23.89% a year and XLK returned 23.68%. Vanguard's benchmark returned 24.01%, and the Technology Select Sector Index returned 23.85%.
Vanguard's 10-year benchmark is not a pure decade of the index in the table. On the firm's Sept. 30 fact sheet, that benchmark uses a transition version of the index from May 2 to Dec. 2, 2018, and the current index after that. The one-, three-, and five-year windows start after Dec. 2, 2018.
No window picks a lasting winner. Whichever fund led, its index led by almost the same margin. In every window, each fund trailed its index by 0.07 to 0.17 percentage points.
From Sept. 14, 2021 through Nov. 11, just over five years of daily closes, the deepest fall from a peak close to a later close was 35.5% for VGT and 34.0% for XLK.
Want more of our stories in Google’s Top Stories? Add etf.net as a preferred source on Google
