VGT vs XLK: fees, holdings and returns

What is the difference between VGT and XLK?#

XLK draws only from the S&P 500, so it leaves out mid-size and small tech companies. VGT includes them, though they are a small slice by value. Both indexes cap how much one company can weigh, and their caps work differently, so the largest companies weigh a little differently in each, and the gap shows in some years. XLK trades in larger amounts each day.

Fund facts checked on the Vanguard VGT page and the SPDR (State Street) XLK page.

Is VGT or XLK cheaper?#

XLK costs less: 0.08% a year against 0.09%. On $10,000, that is about $9 a year for VGT and $8 for XLK. The fund takes its fee out of its own value a little each day, so you never get a bill.

VGT vs XLK performance over the same dates#

Both funds are measured from January 2004 to October 2026, the dates both traded. VGT returned about 14.9% a year and XLK returned about 14.9% a year. VGT came out ahead over this period, which does not mean it will again.

Prices through October 20, 2026. Figures use daily closing prices adjusted for splits, with dividends reinvested. They do not include taxes or the cost of buying and selling. Past results do not tell you what will happen next.

VGT and XLK returns by year#

Which fell further in bad times?#

A drawdown is how far a fund falls from its last high point. VGT’s worst fall was −54.6%, from October 31, 2007 to November 20, 2008. It got back to that high on January 6, 2011.

XLK’s worst fall was −53.0%, from October 31, 2007 to November 20, 2008. It got back to that high on January 19, 2012.

Their daily moves had a correlation of 0.98. A correlation of 1 means two funds always move up and down together. Near 0 means they move on their own. So holding both adds little variety.

Why people choose VGT or XLK#

VGT. People who want technology companies of every size, and use Vanguard, often pick VGT.

XLK. People who want the S&P 500’s tech sector, or trade often, often pick XLK.

Strategies that hold VGT or XLK#

These classic strategies hold one or both at least some of the time. Each is a set of written rules you can open, test and copy.

• Faber sector rotation (the three strongest US sectors), by Mebane Faber, 2010 (holds XLK)
• Inflation Compass (Varadi’s growth and inflation model), by David Varadi, 2026 (holds XLK)

Other funds like VGT and XLK#

Each fund has more funds that hold the same kind of investments, ranked by how closely they move with it: VGT alternatives and XLK alternatives.

Test a mix of VGT and XLK#

Open the builder, add VGT and XLK, and give each a weight, such as 50% and 50%. The backtest shows how the mix would have done, with its worst drop, on daily prices. You can also add a rule, for example to switch between them, and compare. Read the full pages for VGT and XLK, or see more ETF comparisons.

The details#

Both funds use Tactfolio’s stored daily prices, adjusted for splits, with dividends reinvested. They are compared only on days both traded, starting the later fund’s first day, so neither gets a head start. Correlation uses daily returns over the same days. Read what a backtest simulates for more on these measures.