Which Is the Better Tech ETF, Vanguard's VGT or State Street's XLK?

Robert Izquierdo, The Motley Fool

Thu, May 14, 2026 astatine 8:47 AM CDT 4 min read

The State Street Technology Select Sector SPDR ETF (NYSEMKT:XLK) offers a concentrated, low-cost play connected S&P 500 tech, portion the Vanguard Information Technology ETF (NYSEMKT:VGT) provides broader exposure.

Both funds service arsenic halfway pillars for investors seeking assertive maturation done the accusation exertion sector. While the State Street money focuses exclusively connected large-cap exertion stocks wrong the S&P 500, the Vanguard money casts a wider nett crossed the broader U.S. equity market, including small- and mid-cap companies. This quality successful scope influences everything from diversification to dividend output.

Snapshot (cost & size)

Beta measures terms volatility comparative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr instrumentality represents full instrumentality implicit the trailing 12 months. Dividend output is the trailing-12-month organisation yield.

The State Street money is somewhat much affordable with an disbursal ratio of 0.08%. However, the Vanguard money has higher assets nether absorption of $121.3 billion.

Performance & hazard examination

What's wrong

The Vanguard money is simply a broad-market money that includes 310 holdings, providing vulnerability to 98% technology, 1% industrials, and 1% different assets. Its largest positions see Nvidia (NASDAQ:NVDA) astatine 18.47%, Apple (NASDAQ:AAPL) astatine 15.80%, and Microsoft (NASDAQ:MSFT) astatine 10.17%. This money was launched successful 2004 and has a trailing-12-month dividend of $2.41 per share, reflecting its inclusion of assorted market-cap sizes wrong the electronics and machine industries.

In contrast, the State Street money is much concentrated with 73 holdings and was launched successful 1998. It focuses connected large-cap stocks from the S&P 500, and its apical holdings see Nvidia astatine 15.42%, Apple astatine 12.37%, and Microsoft astatine 9.98%. This money is 99% exertion and has paid $0.76 per stock implicit the trailing 12 months. While it tracks a narrower index, the attraction successful top-tier ample caps has contributed to its higher 5-year maturation profile.

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