Artificial Intelligence (AI) ETF Showdown: Vanguard's VGT vs. the iShares SOXX
Key Points
The Vanguard Information Technology ETF offers a lower expense ratio of 0.09% compared to the 0.34% charged by the iShares Semiconductor ETF.
The iShares Semiconductor ETF focuses on a concentrated basket of 30 semiconductor stocks while the Vanguard Information Technology ETF holds 310 technology companies.
The iShares Semiconductor ETF has delivered higher 5-year growth but also shows a deeper maximum drawdown of 45.80%.
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The Vanguard Information Technology ETF (NYSEMKT:VGT) offers broad exposure to the tech sector at a lower cost, while the iShares Semiconductor ETF (NASDAQ:SOXX) provides a highly concentrated play on chipmakers.
These two funds are staple choices for investors seeking exposure to the technology sector and artificial intelligence, collectively managing billions in assets under management (AUM). While the iShares fund concentrates specifically on the American semiconductor industry, the Vanguard fund provides a broader reach across various software and hardware verticals, creating distinct risk profiles for tech-heavy portfolios.
Snapshot (cost & size)
| Metric | SOXX | VGT |
|---|---|---|
| Issuer | iShares | Vanguard |
| Expense ratio | 0.34% | 0.09% |
| 1-yr return (as of June 8, 2026) | 139.72% | 42.87% |
| Dividend yield | 0.30% | 0.30% |
| Beta | 1.78 | 1.34 |
| AUM | $38.4 billion | $144.2 billion |
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
The Vanguard fund is the more affordable option with an expense ratio of 0.09%, which is less than one-third of the cost associated with the iShares fund at 0.34%. Both ETFs offer an identical trailing-12-month dividend yield of 0.30% as of June 8, 2026. While the costs differ, the iShares fund has historically delivered higher returns, albeit with a beta of 1.78 that indicates greater volatility compared to the 1.34 beta of the Vanguard fund.
Performance & risk comparison
| Metric | SOXX | VGT |
|---|---|---|
| Max drawdown (5 yr) | (45.80%) | (35.10%) |
| Growth of $1,000 over 5 years (total return) | $4,162 | $2,575 |
What's inside
The Vanguard Information Technology ETF holds 310 stocks, primarily focusing on technology companies at 98% of the portfolio. Its largest positions include NVIDIA (NASDAQ:NVDA) at 18.60%, Apple (NASDAQ:AAPL) at 14.82%, and Microsoft (NASDAQ:MSFT) at 10.02%. Launched in 2004, the fund has a trailing-12-month dividend of $0.38 per share. It uses a passive management approach to track its index, providing diversified exposure across the broader electronics and computer sectors.
In contrast, the iShares Semiconductor ETF is far more concentrated with only 30 holdings, all within the technology sector, representing 100% of the portfolio. Its largest positions include Micron Technology Inc (NASDAQ:MU) at 11.31%, Advanced Micro Devices Inc (NASDAQ:AMD) at 8.98%, and Marvell Technology Inc (NASDAQ:MRVL) at 8.69%. Launched in 2001, this fund has a trailing-12-month dividend of $1.67 per share. This concentrated focus on chipmakers has historically resulted in higher price volatility but provided significant total returns during semiconductor growth cycles.
For more guidance on ETF investing, check out the full guide at this link.
What this means for investors
Investors seeking exposure to the hot field of artificial intelligence may want to consider the Vanguard Information Technology ETF (VGT) and the iShares Semiconductor ETF (SOXX). These funds offer very different approaches to investing in the AI sector. Deciding between them depends on which strategy appeals to you most.
SOXX targets companies in the semiconductor industry, the key sector enabling AI’s adoption and expansion. Because it focuses only on this one area, the fund contains just 30 stocks. This approach enabled the ETF to deliver an incredible one-year performance of nearly 140%.
However, SOXX is dependent on a handful of businesses, exposing it to the ups and downs of the semiconductor industry. Consequently, the fund is more volatile and possesses greater risk than VGT, as illustrated by its higher beta and max drawdown.
VGT takes a broader strategy by holding equities across the information technology sector. Semiconductor stocks are its largest segment at 37.9%, so it includes businesses in the iShares fund. Moreover, it contains AI heavyweights not in SOXX such as Microsoft.
VGT is for investors who want an ETF that casts a wider net to capture a variety of companies in the AI space. SOXX is for those seeking to target only semiconductor stocks that are seeing outsized returns thanks to AI.
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Robert Izquierdo has positions in Advanced Micro Devices, Apple, Marvell Technology, Microsoft, and Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Apple, Marvell Technology, Micron Technology, Microsoft, Nvidia, and iShares Trust - iShares Semiconductor ETF. The Motley Fool has a disclosure policy.
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