VGT features a significantly lower expense ratio, which can help investors save money on fees.
Both funds are highly concentrated in the same three tech giants, with Nvidia, Apple, and Microsoft accounting for a significant portion of total assets.
The two ETFs share similar betas and max drawdowns, suggesting comparable levels of volatility over the last five years.
The Vanguard Information Technology ETF (NYSEMKT:VGT) and the iShares U.S. Technology ETF (NYSEMKT:IYW) both provide concentrated exposure to the U.S. tech sector.
While both are dominated by the same three massive growth names, their diversification and cost structures may lead investors to prefer one over the other for tech exposure.
| Metric | IYW | VGT |
|---|---|---|
| Issuer | iShares | Vanguard |
| Share price (as of Sept. 29, 2026) | $236.34 | $124.85 |
| Expense ratio | 0.37% | 0.09% |
| 1-yr return (as of Sept. 29, 2026) | 36.0% | 36.1% |
| Dividend yield | 0.10% | 0.36% |
| Beta (5Y monthly) | 1.50 | 1.49 |
| Assets under management (AUM) | $25.2 billion | $147.6 billion |
Beta measures price volatility relative to the S&P 500; beta is calculated from monthly returns over the available fund history (up to five years). The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
VOO is the more affordable option in terms of fees, with an expense ratio of 0.09% -- significantly undercutting IYW's 0.37%. It also offers a slightly higher dividend payout, which could appeal to income-seeking investors.
| Metric | IYW | VGT |
|---|---|---|
| Max drawdown (5 yr) | (39.4%) | (35.1%) |
| Growth of $1,000 over 5 years (total return) | $2,618 | $2,555 |
VGT holds 318 stocks and focuses exclusively on the information technology sector, and its largest positions include Nvidia, Apple, and Microsoft. It was launched in 2004 and has paid $0.47 per share in dividends over the trailing 12 months.
IYW maintains 149 holdings and also tracks the tech industry. Its top three holdings match those of VGT, but each stock makes up a slightly smaller portion of the portfolio. It was launched in 2000 and has paid $0.25 per share in dividends over the trailing 12 months.
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VGT and IYW share many similarities. Both are popular ETFs tracking the technology sector, offering roughly the same risk profiles and total returns over the last five years.
Two areas where they differ, however, are diversification and fees. VGT offers a lower expense ratio of 0.09% compared to 0.37% for IYW, meaning investors can expect to pay $9 or $37 per year, respectively, for every $10,000 invested. While it may seem like a subtle difference, it can add up over time -- especially for those with large account balances.
VGT also offers exposure to more stocks, with more than twice as many holdings as IYW. While this hasn't resulted in a significant difference in risk or returns, it can appeal to investors seeking access to a greater portion of the tech sector.
Finally, while VGT offers a substantially higher assets under management (AUM), it likely won't be a deciding factor for most retail investors. A higher AUM makes it easier for investors to buy and sell large amounts, but even IYW's $25 billion AUM offers plenty of liquidity for most everyday buyers.
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Katie Brockman has positions in Vanguard Information Technology ETF. The Motley Fool has positions in and recommends Apple, Microsoft, and Nvidia. The Motley Fool has a disclosure policy.