Chips or the Whole Tech Stack? SOXX and VGT Offer Very Different Approaches
Key Points
iShares Semiconductor ETF concentrates on a small group of semiconductor stocks, while Vanguard Information Technology ETF provides broader exposure to the entire technology sector.
Vanguard Information Technology ETF is more affordable with an expense ratio of 0.09% compared to 0.34% for the iShares fund.
While iShares Semiconductor ETF has delivered higher total returns over the last five years, it has also experienced greater volatility and a deeper maximum drawdown.
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The iShares Semiconductor ETF (NASDAQ:SOXX) offers concentrated exposure to chipmakers, while the Vanguard Information Technology ETF (NYSEMKT:VGT) provides a broader, lower-cost diversifier for the entire technology sector.
Both funds serve as primary vehicles for betting on digital innovation, yet they follow very different roadmaps. One casts a wide net across software and hardware, while the other zooms in on the hardware foundational to artificial intelligence and high-performance computing.
Snapshot (cost & size)
| Metric | VGT | SOXX |
|---|---|---|
| Issuer | Vanguard | iShares |
| Expense ratio | 0.09% | 0.34% |
| 1-yr return (as of Apr. 27, 2026) | 53.30% | 148.00% |
| Dividend yield | 0.37% | 0.37% |
| Beta | 1.32 | 1.73 |
| AUM | ~$121.3 billion | ~$29.7 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 choice, charging just $9 for every $10,000 invested versus $34 for the iShares fund. Income seekers may also find the Vanguard fund's higher payout more attractive.
Performance & risk comparison
| Metric | VGT | SOXX |
|---|---|---|
| Max drawdown (5 yr) | (35.10%) | (45.80%) |
| Growth of $1,000 over 5 years (total return) | $2,249 | $3,299 |
What's inside
iShares Semiconductor ETF (NASDAQ:SOXX) focuses exclusively on 34 U.S.-listed semiconductor equities. Its largest positions include Broadcom (NASDAQ:AVGO) at 8.05%, AMD (NASDAQ:AMD) at 7.88%, and Micron Technology (NASDAQ:MU) at 7.32%. Launched in 2001, the fund is concentrated in the technology sector and has a trailing-12-month dividend of $1.67 per share.
Vanguard Information Technology ETF (NYSEMKT:VGT) offers a much broader portfolio of 324 holdings. Its top holdings include Nvidia (NASDAQ:NVDA) at 18.47%, Apple (NASDAQ:AAPL) at 15.80%, and Microsoft (NASDAQ:MSFT) at 10.17%. Launched in 2004, the fund is 98% tech-heavy with minor allocations to industrials, communication services, and financial services. It has a trailing-12-month dividend of $0.38 per share.
For more guidance on ETF investing, check out the full guide at this link.
What this means for investors
Semiconductors are the backbone of modern technology, with every smartphone, data center, and AI system depending on them. SOXX makes a concentrated bet on that reality, holding just 34 chip companies including Broadcom, AMD, Micron, and Nvidia. When semiconductor demand surges, as it has during the AI buildout, SOXX can deliver outsized gains. When the chip cycle turns, the losses can be equally sharp.
VGT takes a far broader view, tracking the entire U.S. information technology sector across more than 300 companies spanning software, hardware, services, and yes, semiconductors too. Nvidia sits near the top of both funds, but in VGT it shares the stage with Apple, Microsoft, and hundreds of other technology names that smooth out the volatility of any single sub-sector.
VGT also charges significantly less than SOXX, a gap that compounds meaningfully over time. For investors who want broad technology exposure at low cost, VGT is the more balanced choice. SOXX suits those making a deliberate, high-conviction bet on the semiconductor industry specifically.
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Sara Appino has positions in Apple and Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Apple, Broadcom, Micron Technology, Microsoft, Nvidia, and iShares Trust - iShares Semiconductor ETF. The Motley Fool has a disclosure policy.
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