VGT vs XLK: Which ETF Is Better in 2026?
Last updated early 2026
Short answer
VGT and XLK both give you MSCI US IMI Information Technology 25/50 / Technology Select Sector-style exposure, but they are built differently. VGT leans on MSFT (~16.5%) and is top-heavy, concentrated in its largest names; XLK leads with MSFT (~18.5%) and is top-heavy, concentrated in its largest names. Their top holdings overlap about 62% by weight, so the real question is which construction you want, not whether they are “different funds.”
What's actually inside: VGT vs XLK
The label is the same; the portfolio is not. Their top holdings overlap about 62% by weight (10 shared names: MSFT, NVDA, AAPL, AVGO, ORCL, CRM). That is real overlap, but each still tilts differently, so the two are genuinely different bets under one label.
| VGT | XLK | |
|---|---|---|
| Top holding | MSFT (~16.5%) | MSFT (~18.5%) |
| Top 3 weight | ~46% | ~49% |
| Concentration | top-heavy, concentrated in its largest names | top-heavy, concentrated in its largest names |
| Construction | market-cap-weighted | market-cap-weighted |
Overlap reflects top holdings by weight (an approximation of full-fund overlap), as of early 2026. Verify full holdings with each issuer.
What each fund tracks: index and methodology
VGT tracks MSCI US IMI Information Technology 25/50, and XLK tracks Technology Select Sector. Because they follow different benchmarks, the two funds screen and weight their holdings differently, and that is what produces any gap in exposure, concentration, and return between them.
On construction, VGT is market-cap-weighted and XLK is market-cap-weighted. They share a weighting approach, so any difference comes from the underlying index rather than the method.
So the funds cover similar ground under different rules. Read the holdings overlap above alongside the methodology here to see how much of the difference is real exposure versus labeling.
VGT vs XLK: cost, size, and yield side by side
| VGT | XLK | |
|---|---|---|
| Expense ratio | 0.09% | 0.09% |
| Fee per $10,000 / year | $9 | $9 |
| Assets under management | ~$95 billion | ~$70 billion |
| Dividend yield | ~0.6% | ~0.6% |
| Inception | January 2004 | December 1998 |
The fees match exactly at 0.09%, so cost is not the deciding factor here; the difference, if any, comes from exposure and structure.
On scale, VGT holds about ~$95 billion and XLK about ~$70 billion. Larger funds generally trade at tighter bid-ask spreads and carry deeper options markets, which matters if you trade actively or in size; for buy-and-hold investors it rarely changes the outcome. Both funds yield about the same (~0.6% versus ~0.6%).
Which fund suits which investor
XLK concentrates more weight in its largest holdings (top three about 49%), so it suits an investor who wants the theme expressed through its biggest winners and can tolerate more single-name risk. VGT spreads weight more evenly (top three about 46%), which suits an investor who wants the same theme with less dependence on any one company. Match the fund to how much concentration you actually want.
These are descriptive profiles, not recommendations. What fits you depends on your goals, horizon, and what you already own. Walnut is not an investment adviser.
Before you buy: do you already own this?
The overlap that decides most ETF purchases is not between VGT and XLK, it is with what you already hold. ETF redundancy is invisible without looking through to the underlying holdings: you can already own most of VGT inside a broad fund like an S&P 500 or total-market ETF and not realize it.
This is the part a generic comparison cannot answer, because it depends on your account. Connect your brokerage and Walnut looks through your funds to show your real, combined exposure, flags how much of VGT or XLK you already own elsewhere, and tells you whether adding either just buys the same companies twice, read-only by default, with your login staying at your broker. Walnut is not an investment adviser.
What is VGT?
Tracks the MSCI US Information Technology sector. Cheapest cost vehicle for sector-tech exposure. Excludes Amazon, Alphabet, and Meta because they're classified as Consumer Discretionary or Communication Services, not IT.
What is XLK?
Tracks the Technology Select Sector of the S&P 500. Top three names (Apple, Microsoft, NVIDIA) routinely account for 40%+ of the fund. Like VGT, excludes Amazon, Alphabet, and Meta under sector classification.
VGT or XLK: which should you pick?
This is a choice of which bet you are making. If you want the theme concentrated in its biggest winners, the more top-heavy fund suits you; if you want the theme spread more evenly so no single name dominates, the more diversified one fits. Match the construction to your conviction, then check overlap with what you already own.
VGT vs XLK: the full fund facts
| VGT | XLK | |
|---|---|---|
| Fund | Vanguard Information Technology ETF | Technology Select Sector SPDR Fund |
| Tracks | MSCI US IMI Information Technology 25/50 | Technology Select Sector |
| Expense ratio | 0.09% | 0.09% |
| Dividend yield | ~0.6% | ~0.6% |
| AUM | ~$95 billion | ~$70 billion |
| Top holding | MSFT | MSFT |
| Issuer | Vanguard | State Street SPDR |
Approximate as of early 2026; verify with each issuer.
Vanguard is investor-owned and known for rock-bottom fees. State Street SPDR launched the first US ETF and runs many sector funds.
The bottom line: VGT vs XLK
VGT and XLK share a theme but are built differently (about 62% overlap by weight), so pick the construction that matches your conviction. Either way, the decisive check is overlap with your real portfolio. Walnut can show that before you buy. It is not an investment adviser.
Both funds lean on MSFT, so understanding that one company explains a lot of what drives either ETF.
Wondering how VGT or XLK fits the portfolio you already own? Walnut is an AI investing app that connects your brokerage read-only and answers questions like that about your actual holdings: overlap, concentration, and how each position tracks the S&P 500. Compare the best AI portfolio analyzers or see the best AI investing apps in 2026.
Investing in VGT with AI
Walnut connects your real brokerage so you can see how VGT and XLK overlap with what you already own, analyze either by chatting through Claude or ChatGPT, and place any trade yourself.
FAQ
What is the difference between VGT and XLK?
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VGT tracks MSCI US IMI Information Technology 25/50 (0.09%); XLK tracks Technology Select Sector (0.09%). They cover similar ground but are built differently, and their top holdings overlap about 62% by weight, so the choice is about concentration and construction.
Do VGT and XLK hold the same stocks?
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They share 10 of their top holdings (MSFT, NVDA, AAPL, AVGO, ORCL, CRM), roughly 60% of VGT and 64% of XLK by weight. There is real overlap, so owning both is less diversification than it looks. This reflects top holdings, not the full constituent lists; verify with each issuer.
Is VGT or XLK cheaper?
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VGT charges 0.09% and XLK charges 0.09% as of early 2026, so cost is a wash. On a $10,000 holding that is about $9 vs $9 a year.
Should you own both VGT and XLK?
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Usually not: they overlap about 62% by weight, so owning both adds cost without much extra diversification. Walnut can show the real overlap, and the overlap with what you already own, before you buy.
Which has a higher dividend yield, VGT or XLK?
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VGT yields about ~0.6% and XLK about ~0.6% (early 2026, approximate). They are close. For most long-term investors total return and cost matter more than the headline yield.
How much do VGT and XLK overlap?
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By top holdings, VGT and XLK overlap roughly 62% by weight, sharing 10 names (MSFT, NVDA, AAPL, AVGO, ORCL, CRM). That is meaningful overlap, so owning both is less diversification than it appears. This uses top holdings as a proxy for the full funds; confirm with each issuer.
VGT vs XLK: which is better?
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They cover similar ground built differently (about 62% overlap by weight), so "better" depends on whether you want the theme concentrated in its biggest names or spread more evenly. Walnut is not an investment adviser.
Which is better for a long-term investor, VGT or XLK?
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Over a long horizon the deciding factors are cost and how much concentration you can hold through downturns, more than recent performance. Pick the construction you can stay invested in. Figures are approximate as of early 2026.
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Walnut is informational, not investment advice. ETF figures are approximations stamped to early 2026; verify current data with each issuer before deciding. Nothing here is a recommendation.