Broad Technology Exposure or the Semiconductor Industry Powering AI? VGT vs. SOXX
Key Points
SOXX charges a much higher expense ratio and is far more concentrated than VGT
SOXX has dramatically outperformed VGT over the past year but with sharper drawdowns and higher volatility
VGT offers broader tech exposure, while SOXX is focused exclusively on semiconductors
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Vanguard Information Technology ETF (NYSEMKT:VGT) offers broad tech sector coverage at a low cost, while iShares Semiconductor ETF (NASDAQ:SOXX) focuses tightly on chipmakers, charges a higher fee, and has delivered higher recent returns but with greater risk.
Both VGT and SOXX target technology stocks, but their scopes diverge: VGT tracks the entire U.S. tech sector, covering over 300 companies, while SOXX zeroes in on just 30 semiconductor names. This comparison looks at cost, performance, risk, and portfolio makeup to help clarify which approach may appeal depending on investor goals.
Snapshot (cost & size)
| Metric | VGT | SOXX |
|---|---|---|
| Issuer | Vanguard | IShares |
| Expense ratio | 0.09% | 0.34% |
| 1-yr return (as of 2026-03-11) | 34.0% | 78.1% |
| Dividend yield | 0.4% | 0.5% |
| Beta | 1.27 | 1.54 |
| AUM | $130.3 billion | $21.3 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.
SOXX charges a much higher expense ratio than VGT, making VGT the more affordable choice for long-term cost-conscious investors. SOXX edges out VGT on yield, but the difference is minimal at just 0.1 percentage points.
Performance & risk comparison
| Metric | VGT | SOXX |
|---|---|---|
| Max drawdown (5 y) | -35.08% | -45.76% |
| Growth of $1,000 over 5 years | $2,059 | $2,546 |
What's inside
SOXX targets the semiconductor industry, delivering pure-play exposure to 30 chipmakers. Its top holdings include Micron Technology Inc (NASDAQ:MU), Nvidia Corp (NASDAQ:NVDA), and Applied Material Inc (NASDAQ:AMAT), with 100% of assets in technology stocks. The fund has a long track record at 24.7 years, and its concentrated basket means performance is tightly linked to the fortunes of the semiconductor sector.
VGT, on the other hand, provides diversified technology exposure across 310 companies, spanning hardware, software, and services. Its largest positions are in NVIDIA Corp (NASDAQ:NVDA), Apple Inc (NASDAQ:AAPL), and Microsoft Corp (NASDAQ:MSFT). While both funds are heavily weighted in tech, VGT’s broader approach lessens the impact of any single industry segment.
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What this means for investors
Technology exposure can mean owning the entire sector or concentrating on semiconductors, the industry that underpins much of today’s computing infrastructure. That distinction sits at the center of the choice between the Vanguard Information Technology ETF and the iShares Semiconductor ETF.
VGT tracks the entire U.S. technology sector, holding hundreds of companies across software, hardware, and technology services. Its largest holdings, such as Apple, Microsoft, and Nvidia, highlight the influence of mega-cap firms on sector performance. In contrast, SOXX invests exclusively in semiconductor companies, including chip designers, manufacturers, and equipment providers. As a result, SOXX’s performance closely follows global semiconductor demand, offering less diversification but greater exposure to the chip industry.
For investors, the decision ultimately comes down to how concentrated their technology allocation should be. VGT serves as a core technology holding that captures the sector’s leadership across multiple industries. It is a suitable choice for investors looking for broad exposure to technology, such as those building a diversified portfolio or seeking steady and long-term growth from industry leaders. On the other hand, SOXX is a more specialized investment tied closely to the semiconductor cycle. This ETF can be a better fit for investors with a higher risk tolerance or those looking to target growth opportunities in the semiconductor space.
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Eric Trie has positions in Nvidia. The Motley Fool has positions in and recommends Apple, Applied Materials, Micron Technology, Microsoft, Nvidia, and iShares Trust - iShares Semiconductor ETF and is short shares of Apple. The Motley Fool has a disclosure policy.
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