Is VGT or FTEC the Better Tech ETF? Here's How They Compare on Risk, Returns, and Fees

The Fidelity MSCI Information Technology Index ETF ( FTEC +2.13%) and the Vanguard Information Technology ETF ( VGT +2.02%) are both passively managed funds that aim to mirror the U.S. information technology sector , with each offering broad, diversified exposure to the industry. For investors comparing these two, the choice often comes down to cost, size, and subtle differences in holdings and liquidity, rather than differences in sector or performance profiles. Snapshot (cost & size) Metric FTEC VGT Issuer Fidelity Vanguard Expense ratio 0.08% 0.09% 1-yr return (as of Dec. 19, 2025) 21.66% 21.65% Dividend yield 0.40% 0.41% Beta (5Y monthly) 1.32 1.33 AUM $16.7 billion $130.0 billion Beta measures price volatility relative to the S&P 500. The 1-yr return represents total return over the trailing 12 months. FTEC is very slightly more affordable thanks to its lower expense ratio, while VGT edges ahead on dividend yield, offering a slightly higher payout for income-focused investors. Performance & risk comparison Metric FTEC VGT Max drawdown (5 y) -34.95% -35.08% Growth of $1,000 over 5 years $2,181 $2,165 What's inside VGT tracks U.S. tech stocks and, with 322 holdings, is one of the largest sector ETFs by assets under management at $130 billion. It has been in the market for over two decades and spreads its assets across the same sector mix as FTEC: 98% technology, with small allocations to communication services and financials. Its top holdings are Nvidia , Apple , and Microsoft , each making up a relatively significant portion of the fund. There are no leverage, ESG, or other quirky features to note. FTEC offers nearly identical sector exposure, with 288 holdings and similar weightings to major tech names, led by Nvidia, Apple, and Microsoft. Both funds track broad-based tech benchmarks and lack any unusual structural or trading quirks. For more guidance on ETF investing, check out the full guide at this link . What this means for investors FTEC and VGT are virtually identical in most ways. They both track the broader technology industry, with the same top holdings and sector allocations. VGT offers a slightly higher dividend payout, while FTEC boasts a marginally lower expense ratio. Both figures are so similar, however, that most investors won't notice a meaningful difference between the funds in those regards. Where they do differ, though, is the number of holdings and AUM. VGT is larger on both accounts, with 33 more holdings and a much larger AUM. More holdings increase diversification, while a larger AUM results in greater liquidity -- making it easier for investors to buy and sell without affecting stock price. Another subtle difference between the two ETFs is the allocation toward top holdings. While the top three positions are identical, VGT is tilted slightly more toward Nvidia, with the stock making up 18.19% of the portfolio compared to 16.61% for FTEC. Combined, VGT's top three holdings make up 45.41% of total assets, compared to 44.34% for FTEC. It's a subtle difference, but it could result in slightly different...

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