Identical Tech Exposure, Lower Cost or Greater Liquidity? VGT vs. FTEC
Key Points
FTEC matches VGT on sector and top holdings, but charges a slightly lower expense ratio
Both ETFs delivered nearly identical 1-year and 5-year returns, with minimal differences in risk and drawdown
VGT boasts much larger assets under management and greater trading liquidity compared to FTEC
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Vanguard Information Technology ETF (NYSEMKT:VGT) and Fidelity MSCI Information Technology Index ETF (NYSEMKT:FTEC) both target U.S. technology stocks with similar sector allocations and top holdings, but VGT commands far greater assets under management and higher daily trading volume, while FTEC edges out with a marginally lower expense ratio.
Both VGT and FTEC are passively managed funds focused on the U.S. information technology sector, offering exposure to major players like Nvidia, Apple, and Microsoft. This comparison looks at their costs, performance, risk, and portfolio details to help investors assess which may better fit their needs.
Snapshot (cost & size)
| Metric | VGT | FTEC |
|---|---|---|
| Issuer | Vanguard | Fidelity |
| Expense ratio | 0.09% | 0.08% |
| 1-yr return (as of 2026-03-24) | 23.7% | 24.1% |
| Dividend yield | 0.42% | 0.44% |
| Beta | 1.32 | 1.31 |
| AUM | $126.5 billion | $15.96 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.
FTEC is slightly more affordable, charging a 0.08% expense ratio versus VGT’s 0.09%, but VGT delivers a marginally higher dividend yield at 0.5% compared to FTEC’s 0.4%.
Performance & risk comparison
| Metric | VGT | FTEC |
|---|---|---|
| Max drawdown (5 y) | -35.07% | -34.95% |
| Growth of $1,000 over 5 years | $2,035 | $2,057 |
What's inside
FTEC tracks the MSCI USA IMI Information Technology 25/50 Index, holding 294 stocks across the technology sector. Its largest positions are Nvidia Corp (NASDAQ:NVDA) at 18.25%, Apple Inc (NASDAQ:AAPL) at 15.41%, and Microsoft Corp (NASDAQ:MSFT) at 10.07%. The fund launched in October 2013 and, like VGT, is nearly 98% weighted to technology, with small allocations to industrials and financial services. There are no leverage, currency hedging, or ESG quirks.
VGT is similarly concentrated: 98% in technology, with top holdings in NVIDIA Corp (NASDAQ:NVDA), Apple Inc (NASDAQ:AAPL), and Microsoft Corp (NASDAQ:MSFT), though it owns slightly more companies at 310. Both funds provide broad, cap-weighted exposure to U.S. tech giants, with minimal sector or holdings differences.
For more guidance on ETF investing, check out the full guide at this link.
What this means for investors
When two ETFs hold nearly identical technology stocks in similar weights ,the real difference is how they are managed, not what they invest in. That is the case with the Vanguard Information Technology ETF and the Fidelity MSCI Information Technology Index ETF.
Both funds are dominated by the same group of mega-cap companies, with Nvidia, Apple, and Microsoft accounting for a substantial portion of returns. Their broader holdings are also closely aligned, which keeps performance differences minimal over time. The main distinctions are cost and scale. FTEC charges a slightly lower fee, while VGT’s larger size and heavier trading volume can support tighter spreads and smoother execution.
For investors, the choice is less about different technology exposure, but about finding the most efficient way to invest in it. A lower expense ratio can benefit long-term holders, while greater liquidity may matter more for larger positions or frequent trading. In practice, both funds deliver nearly the same portfolio, so the decision comes down to whether cost or trading efficiency carries more weight for you.
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Eric Trie has positions in Nvidia. The Motley Fool has positions in and recommends Apple, Microsoft, and Nvidia and is short shares of Apple. The Motley Fool has a disclosure policy.
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