🤝 BFF Take
Similar Funds — XLK Slightly Cheaper, VGT Slightly Broader
XLK (Technology Select Sector SPDR) and VGT (Vanguard Information Technology ETF) are both technology ETFs but draw from different universes. XLK holds only the technology sector stocks within the S&P 500 — about 65 large-cap names, concentrating heavily on Apple, Microsoft, and Nvidia. VGT uses the MSCI US Investable Market IT index, which includes S&P 500 tech names PLUS mid and small-cap technology companies — roughly 300+ holdings. Despite VGT's broader universe, the top holdings are nearly identical since mega-cap tech dominates the weighting. XLK charges 0.09% vs VGT's 0.10%. Both are essentially a mega-cap tech concentration play. Note: Visa and Mastercard are in XLK (classified in tech by S&P GICS) but NOT in VGT (classified as financials by MSCI) — a real composition difference.
📋 Quick Takeaways
💳XLK includes Visa and Mastercard (S&P classifies them as tech); VGT does NOT — a meaningful composition difference
📊XLK holds ~65 S&P 500 tech stocks; VGT holds ~300+ including small and mid-cap tech companies
💰XLK costs 0.09%; VGT costs 0.10% — nearly identical fees, XLK marginally cheaper
📊 Data-Based Take: XLK has the lower fee
Whether the lower-cost fund suits your situation depends on your existing holdings, account type, tax situation, and how you use each fund. This is a cost comparison, not a personalized recommendation.
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Reviewed by a CFA® Charterholder · Data updated Jun 2026 · Educational only, not financial advice
XLK
Technology Select Sector SPDR ETF
VGT
Vanguard Information Technology ETF
📋 XLK vs VGT — Key Facts Side by Side
| Metric |
XLK |
VGT |
| Fund Name |
Technology Select Sector SPDR ETF |
Vanguard Information Technology ETF |
| Issuer |
State Street |
Vanguard |
| Tracks Index |
S&P 500 Technology Sector |
MSCI US Investable Market IT 25/50 |
| Expense Ratio |
0.09% ✓ |
0.10% |
| Cost per $10K/yr |
$9.00 |
$10.00 |
| AUM |
$75B |
$80B |
| Holdings |
65 |
320 |
| Inception |
1998 |
2004 |
| 1-Year Return |
+26.40% |
+25.20% |
| 3-Year Return |
+14.20% |
+13.80% |
| 5-Year Return |
+21.80% |
+21.40% |
| Avg Bid-Ask Spread |
0.00% |
0.00% |
Data from ETF BFF database. Returns are annualised. Not investment advice.
📊 XLK vs VGT — Annualised Returns
Annualised returns (trailing, price-based). Past performance does not guarantee future results.
🎯 Should You Buy XLK or VGT?
Choose if...
XLK
- You want the lowest fees — saves ~$1/yr per $10K vs VGT
- You already use State Street and prefer staying within their fund family
Choose if...
VGT
- You want broader diversification (320 holdings vs 65)
- You already use Vanguard and prefer staying within their fund family
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❓ XLK vs VGT — Frequently Asked Questions
What is the difference between XLK and VGT?
XLK holds only tech sector stocks within the S&P 500 (~65 names) using S&P GICS sector classification. VGT tracks MSCI's US Information Technology universe (~300+ stocks) including mid and small-cap tech. The most significant holdings difference: XLK includes Visa and Mastercard (S&P classifies them as tech); VGT does not (MSCI classifies them as financials). Both heavily concentrate in Apple, Microsoft, and Nvidia at the top.
Has XLK or VGT performed better historically?
Performance between XLK and VGT has been very similar over time, within 1-2% per year. The key driver for both is the mega-cap tech holdings — Apple, Microsoft, Nvidia — which dominate both portfolios by weight. XLK has occasionally benefited from Visa/Mastercard inclusion when payments outperform; VGT gets more from small/mid-cap tech when that segment leads.
Should I own XLK or VGT alongside VOO?
Adding either alongside VOO or VTI intentionally overweights technology beyond its natural S&P 500 weight (~32%). This is a deliberate active bet on technology outperformance. Technology has been the dominant US sector for over a decade, but sector concentration adds meaningful risk. In 2022, both XLK and VGT fell over 30% while the S&P 500 fell ~18%. Sector ETFs work best for investors who want a specific thesis-driven allocation, not as core holdings.
Is QQQ similar to XLK or VGT?
QQQ (Nasdaq-100) is often compared to tech ETFs but differs in a few ways: QQQ includes non-tech Nasdaq companies like Amazon, Tesla, and Costco. XLK and VGT specifically target the IT sector. That said, the top 10 holdings are heavily overlapping across all three — Apple, Microsoft, and Nvidia lead all of them. QQQ charges 0.20%, making it more expensive than XLK (0.09%) or VGT (0.10%).
What is the GICS sector classification dispute between XLK and VGT?
S&P (used by XLK) classifies Visa and Mastercard under the Technology sector using GICS. MSCI (used by VGT) classifies them under Financials. This is a longstanding disagreement between index providers about whether payments companies are fundamentally tech or financial services businesses. The result: XLK includes V and MA (~5% combined weight); VGT does not. This is the most meaningful fundamental composition difference between the two ETFs.
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ℹ️ Data shown is for educational purposes and may not reflect the most current figures. Returns are trailing price-based and exclude dividend reinvestment. Past performance does not guarantee future results. ETF BFF is not a licensed financial advisor — this is not personalized financial advice.