Guide · Technology
Best technology sector ETFs
A technology sector fund holds the information-technology slice of the US market at market-cap weight — and the slice is narrower than the everyday meaning of "tech." Under the GICS sector scheme these funds follow, Alphabet, Meta, and Netflix sit in communication services and Amazon and Tesla sit in consumer discretionary, so none of them appear in VGT, XLK, or FTEC. What is in the funds: Apple, Microsoft, NVIDIA, the semiconductor complex, and enterprise software. The result is a deliberately concentrated bet — the three cheapest funds in the category each carry 57–62% of assets in their top ten names.
How the scoring ranks these funds
The top three — VGT, FTEC, and XLK, separated by about half a composite point — all run 8–9 bps, so cost and liquidity are near-ties; the ordering comes down to the concentration sub-score, a linear scale on top-10 weight, where XLK's 61% scores a few points below VGT and FTEC's 57–59%. That is why XLK ranks third despite the lowest fee. The iShares funds (IGM, IXN, IYW, plus IGV, the software-only slice) drop eleven to thirteen points on 38–39 bps fees. The semiconductor funds appear here via the chip-slice category and carry their own, steeper concentration profiles.
See the methodology for the full formula behind each sub-score.
Top picks
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83
composite / 100
Fidelity's MSCI information-technology fund, effectively tied with VGT at the top of the category — the two trade places as prices move. 8.4 bps; tracks the MSCI USA IMI Information Technology 25/50 Index — the same index family as VGT — across ~290 holdings. Functionally VGT at a smaller AUM; because both track the same MSCI index, they are substantially identical for wash-sale purposes and not tax-loss-harvesting partners for each other.
- Expense
- 0.084%
- AUM
- $20.96B
- Issuer
- Fidelity
- Detail
- FTEC page →
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83
composite / 100
Vanguard's information-technology fund and the largest in the category at roughly $170B — well ahead of XLK. 9 bps; tracks the MSCI US Investable Market Information Technology 25/50 Index across ~320 holdings, so it reaches further into mid- and small-cap tech than XLK does. NVIDIA alone is ~17% of the fund as of the latest filing.
- Expense
- 0.090%
- AUM
- $169.25B
- Issuer
- Vanguard
- Detail
- VGT page →
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83
composite / 100
State Street's Technology Select Sector SPDR — the 1998 original. 8 bps, but it holds only the ~75 technology members of the S&P 500, with no mid- or small-cap extension. Top-10 weight (~61%) runs slightly above VGT/FTEC, and the Select Sector index's capping rules can push individual mega-cap weights away from pure market cap. The VGT–XLK compare page shows the holdings gap directly.
- Expense
- 0.080%
- AUM
- $123.91B
- Issuer
- State Street
- Detail
- XLK page →
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72
composite / 100
iShares' Expanded Tech Sector fund — the exception to the GICS quirk. Its S&P North American Expanded Technology index reaches across sector lines to include Alphabet, Meta, and Netflix alongside the standard tech names, which is why its top-10 weight (~54%) is actually lower than the pure-sector funds'. The trade-off is fee: 39 bps against VGT's 9.
- Expense
- 0.39%
- AUM
- $10.71B
- Issuer
- iShares
- Detail
- IGM page →
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70
composite / 100
VanEck's semiconductor fund and the largest chip fund at ~$77B — the narrower slice for isolating the semiconductor industry rather than the whole sector. 35 bps and the most concentrated fund on this page: ~72% in the top ten, with NVIDIA near 20% and Taiwan Semiconductor near 12% — roughly three times TSMC's weight in SOXX; the SMH–SOXX compare page shows the difference directly.
- Expense
- 0.35%
- AUM
- $77.20B
- Issuer
- VanEck
- Detail
- SMH page →
Also in the category
Other funds in the same category, ranked by composite score.
What "technology" excludes under GICS
The GICS classification scheme that these funds inherit was reshuffled in 2018: Alphabet, Meta, and Netflix were moved to the communication-services sector, and Amazon and Tesla have always sat in consumer discretionary. A pure information-technology fund therefore misses five of the companies most people picture when they say "tech." IGM's expanded-tech index is the catalog fund that crosses those sector lines, at a 39 bps fee; the alternative is pairing a tech fund with a communication-services fund, which adds back the telecom carriers and media names along with Alphabet and Meta.
How much tech a total-market fund already holds
Information technology is the largest sector in the US market, and the overlap with a broad core is direct: VTI's three largest holdings — NVIDIA, Apple, Microsoft, roughly 17% of the fund combined — are the same three names that make up 39–43% of FTEC, VGT, and XLK. A tech sleeve on top of a total-market core is not diversification; it is a deliberate overweight of the positions the core already holds most of. The overlap analyzer on the tools page quantifies this for any specific pairing.
Concentration is the category, not a flaw in any fund
Every pure-sector fund here carries 57–64% of assets in its top ten holdings, and single positions reach 15–18% (NVIDIA in VGT/FTEC). The 25/50 capping rules in the MSCI indexes and the Select Sector methodology exist to keep these funds RIC-compliant, not to reduce concentration meaningfully. The composite's concentration sub-score reflects this, which is why no tech sector fund scores in the range the broad-market funds occupy — the score difference is information about the exposure, not a data artifact. None of the seven lazy portfolios on this site include a technology sector fund.
The semiconductor slice
The chip funds are a sector-within-a-sector and they differ from each other more than the broad tech funds do. SMH (35 bps) tracks a 25-name index, includes Taiwan Semiconductor at ~12%, and runs ~72% top-10 weight. SOXX (34 bps) spreads across ~30 names at ~57% top-10, with TSMC at ~3.5%. XSD (35 bps) uses a Select-Industry methodology that weights closer to equal, bringing top-10 weight down to ~31% — the highest-scoring of the three on concentration, and a meaningfully different bet: equal-weighting tilts toward the smaller chipmakers rather than NVIDIA and Broadcom.
Common questions
- Why doesn't XLK or VGT hold Alphabet, Meta, or Amazon?
- Sector funds follow the GICS classification scheme, which places Alphabet, Meta, and Netflix in the communication-services sector and Amazon and Tesla in consumer discretionary. Only companies classified under information technology — Apple, Microsoft, NVIDIA, the semiconductor and software names — appear in a pure tech sector fund. IGM tracks an expanded-tech index that deliberately crosses those sector lines and does hold Alphabet, Meta, and Netflix, at a higher fee.
- What is the difference between VGT and XLK?
- Index breadth. XLK holds only the ~75 technology members of the S&P 500; VGT tracks an MSCI investable-market index with ~320 holdings, extending into mid- and small-cap tech. The fee gap is one basis point (8 vs. 9 bps) and the top holdings are the same names at similar weights, so the practical difference is the small-cap tail and which index family's capping rules apply. The VGT–XLK compare page shows the weighted holdings overlap directly.
Guide. Picks come from the live PlainIndex composite for this category; editorial commentary on each pick is hand-written. Re-pulled with every catalog refresh.
PlainIndex publishes data and editorial commentary — nothing here is personalized investment advice. Read the methodology for how the scores referenced here are computed.