Vanguard VGT vs. iShares SOXX: Is Broad Tech Diversification or Semiconductor Stocks the Better Investment?
Key Points
VGT offers a significantly lower expense ratio than SOXX, helping investors save on fees.
SOXX has delivered nearly double the five-year total return of the Vanguard fund, but it carries a much higher risk profile.
VGT provides broader diversification with over 300 holdings compared to the highly concentrated 30 holdings in SOXX.
- 10 stocks we like better than Vanguard Information Technology ETF ›
Both the Vanguard Information Technology ETF (NYSEMKT:VGT) and the iShares Semiconductor ETF (NASDAQ:SOXX) serve as vehicles for technology exposure, but their strategies differ in scope.
VGT tracks a wide index of information technology companies, while SOXX focuses exclusively on the semiconductor industry. This distinction may appeal to different risk tolerances — here’s how the two stack up.
Snapshot (cost & size)
| Metric | SOXX | VGT |
|---|---|---|
| Issuer | iShares | Vanguard |
| Expense ratio | 0.34% | 0.09% |
| 1-yr return (as of June 17, 2026) | 163.2% | 50.4% |
| Dividend yield | 0.29% | 0.32% |
| Beta (5Y monthly) | 2.26 | 1.42 |
| Assets under management (AUM) | $38.4 billion | $147.3 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.
VGT is the more affordable option, with a substantially lower expense ratio than SOXX. Both funds offer a similar advantage for income investors, with nearly identical dividend yields.
Performance & risk comparison
| Metric | SOXX | VGT |
|---|---|---|
| Max drawdown (5 yr) | -45.8% | -35.1% |
| Growth of $1,000 over 5 years (total return) | $4,207 | $2,516 |
What's inside
VGT targets a broad range of technology companies across all industry subsectors. It holds 323 different securities, and its largest positions include Nvidia, Apple, and Microsoft.
In contrast, SOXX is a concentrated industry play with only 30 total holdings. Its largest positions include Micron Technology, Advanced Micro Devices, and Marvell Technology.
For more guidance on ETF investing, check out the full guide at this link.
What this means for investors
VGT and SOXX both focus on technology, but their different approaches may appeal to different investor goals.
VGT is more diversified, capturing the broader tech industry. This can provide some risk protection, as it holds more than 10 times as many stocks as SOXX and offers exposure to multiple areas of the technology sector. It’s also experienced a milder max drawdown with a lower beta, suggesting less severe price fluctuations over the last five years.
While SOXX is the more volatile of the two, historically, it has also significantly outperformed VGT in both one- and five-year total returns. The semiconductor industry plays a pivotal role in the development of artificial intelligence (AI), so if AI continues to thrive, SOXX could become even more lucrative.
Ultimately, the choice between these two ETFs will come down to your goals and risk tolerance. Investors seeking greater diversification may prefer VGT’s broader take on tech, while those looking to add semiconductor stocks to their portfolios might prefer SOXX’s narrower approach.
Should you buy stock in Vanguard Information Technology ETF right now?
Before you buy stock in Vanguard Information Technology ETF, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Vanguard Information Technology ETF wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $424,531!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,273,016!*
Now, it’s worth noting Stock Advisor’s total average return is 940% — a market-crushing outperformance compared to 209% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of June 18, 2026.
Katie Brockman has positions in Vanguard Information Technology ETF. 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.
Recommended Articles
