The Vanguard Data Expertise ETF (NYSEMKT:VGT) provides broad publicity to the tech sector at a decrease price, whereas the iShares Semiconductor ETF (NASDAQ:SOXX) gives a extremely concentrated play on chipmakers.
These two funds are staple decisions for traders searching for publicity to the expertise sector and synthetic intelligence, collectively managing billions in belongings below administration (AUM). Whereas the iShares fund concentrates particularly on the American semiconductor business, the Vanguard fund gives a broader attain throughout numerous software program and {hardware} verticals, creating distinct threat profiles for tech-heavy portfolios.
Snapshot (price & measurement)
Beta measures value volatility relative to the S&P 500; beta is calculated from five-year month-to-month returns. The 1-yr return represents complete return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
The Vanguard fund is the extra reasonably priced choice with an expense ratio of 0.09%, which is lower than one-third of the associated fee related to the iShares fund at 0.34%. Each ETFs provide an equivalent trailing-12-month dividend yield of 0.30% as of June 8, 2026. Whereas the prices differ, the iShares fund has traditionally delivered larger returns, albeit with a beta of 1.78 that signifies better volatility in comparison with the 1.34 beta of the Vanguard fund.
Efficiency & threat comparability
What’s inside
The Vanguard Data Expertise ETF holds 310 shares, primarily specializing in expertise corporations at 98% of the portfolio. Its largest positions embrace NVIDIA (NASDAQ:NVDA) at 18.60%, Apple (NASDAQ:AAPL) at 14.82%, and Microsoft (NASDAQ:MSFT) at 10.02%. Launched in 2004, the fund has a trailing-12-month dividend of $0.38 per share. It makes use of a passive administration strategy to trace its index, offering diversified publicity throughout the broader electronics and pc sectors.
In distinction, the iShares Semiconductor ETF is way extra concentrated with solely 30 holdings, all inside the expertise sector, representing 100% of the portfolio. Its largest positions embrace Micron Expertise Inc (NASDAQ:MU) at 11.31%, Superior Micro Gadgets Inc (NASDAQ:AMD) at 8.98%, and Marvell Expertise Inc (NASDAQ:MRVL) at 8.69%. Launched in 2001, this fund has a trailing-12-month dividend of $1.67 per share. This concentrated give attention to chipmakers has traditionally resulted in larger value volatility however offered important complete returns throughout semiconductor progress cycles.
For extra steering on ETF investing, take a look at the total information at this hyperlink.
What this implies for traders
Buyers searching for publicity to the recent subject of synthetic intelligence might wish to take into account the Vanguard Data Expertise ETF (VGT) and the iShares Semiconductor ETF (SOXX). These funds provide very totally different approaches to investing within the AI sector. Deciding between them depends upon which technique appeals to you most.
SOXX targets corporations within the semiconductor business, the important thing sector enabling AI’s adoption and enlargement. As a result of it focuses solely on this one space, the fund incorporates simply 30 shares. This strategy enabled the ETF to ship an unbelievable one-year efficiency of practically 140%.
Nevertheless, SOXX depends on a handful of companies, exposing it to the ups and downs of the semiconductor business. Consequently, the fund is extra unstable and possesses better threat than VGT, as illustrated by its larger beta and max drawdown.
VGT takes a broader technique by holding equities throughout the data expertise sector. Semiconductor shares are its largest phase at 37.9%, so it contains companies within the iShares fund. Furthermore, it incorporates AI heavyweights not in SOXX akin to Microsoft.
VGT is for traders who need an ETF that casts a wider internet to seize a wide range of corporations within the AI house. SOXX is for these searching for to focus on solely semiconductor shares which might be seeing outsized returns due to AI.
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Robert Izquierdo has positions in Superior Micro Gadgets, Apple, Marvell Expertise, Microsoft, and Nvidia. The Motley Idiot has positions in and recommends Superior Micro Gadgets, Apple, Marvell Expertise, Micron Expertise, Microsoft, Nvidia, and iShares Belief – iShares Semiconductor ETF. The Motley Idiot has a disclosure coverage.
Synthetic Intelligence (AI) ETF Showdown: Vanguard’s VGT vs. the iShares SOXX was initially revealed by The Motley Idiot
