IYW vs. VGT: Is Alphabet Worth Paying Four Times More in Fees?

3 hours ago 4

Sara Appino, The Motley Fool

Wed, May 27, 2026 astatine 9:53 AM CDT 4 min read

Comparing iShares U.S. Technology ETF (NYSEMKT:IYW) and Vanguard Information Technology ETF (NYSEMKT:VGT) reveals differences successful outgo structure, diversification, and assemblage boundaries that could interaction semipermanent portfolio efficiency.

Both funds people the growth-heavy tech assemblage but utilize antithetic classification standards. While the iShares money includes connection services giants similar Alphabet, the Vanguard money focuses much strictly connected accusation technology. Choosing betwixt them requires balancing circumstantial assemblage vulnerability against the resistance of absorption fees connected full returns.

Snapshot (cost & size)

Metric

IYW

VGT

Issuer	iShares	Vanguard
Expense ratio	0.38%	0.09%
1-yr instrumentality (as of May 20, 2026)	50.5%	49.2%
Dividend yield	0.1%	2.1%
Beta	1.33	1.32
Assets nether absorption (AUM)	$23.7 billion	$144.2 billion

Beta measures terms volatility comparative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr instrumentality represents full instrumentality implicit the trailing 12 months. Dividend output is the trailing-12-month organisation yield.

Vanguard Information Technology ETF is much affordable with an disbursal ratio of 0.09% compared to 0.38% for iShares U.S. Technology ETF. This outgo quality is accompanied by a higher payout, arsenic the Vanguard money offers a 2.1% output portion the iShares money provides 0.1%.

Performance & hazard examination

Metric

IYW

VGT

Max drawdown (5 yr)	(39.4%)	(35.1%)
Growth of $1,000 implicit 5 years (total return)	$2,689	$2,575

What's wrong

Vanguard Information Technology ETF (NYSEMKT:VGT) concentrates 98% of its assets successful the exertion sector, with insignificant allocations to industrials and cash. Its largest positions see Nvidia (NASDAQ:NVDA) astatine 18.60%, Apple (NASDAQ:AAPL) astatine 14.82%, and Microsoft (NASDAQ:MSFT) astatine 10.02%. The fund, which holds 310 stocks and was launched successful 2004, has paid $2.41 per stock implicit the trailing 12 months.

Conversely, iShares U.S. Technology ETF (NYSEMKT:IYW) provides a antithetic tilt with 81% successful exertion and 18% successful connection services. This vulnerability brings successful Alphabet (NASDAQ:GOOGL) astatine 7.22%, alongside Nvidia astatine 16.56% and Apple Inc astatine 13.84%. The money holds 139 positions, was launched successful 2000, and has a trailing-12-month dividend of $0.27 per share.

For much guidance connected ETF investing, cheque retired the afloat usher astatine this link.

What this means for investors

For investors who privation targeted vulnerability to the exertion sector, IYW and VGT are earthy starting points. Both are passive, some are U.S.-focused, and some number Nvidia, Apple, and Microsoft among their largest positions. But beneath that aboveground similarity, the 2 funds person precise antithetic ideas astir what belongs successful a tech portfolio.

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