Someone asks:
I am interested in adding some technology exposure to my portfolio. Which ETF would be a better choice: FTEC (Fidelity Information Technology Index ETF) or VGT (Information Technology Index Fund ETF Shares)?
If you’re looking for a fund that offers the same exposure to technology stocks as VGT, then it’s worth considering Fidelity MSCI Information Technology Index Fund ETF (FTEC).
VGT: Vanguard Information Technology Index Fund ETF
VGT is an ETF managed by Vanguard that tracks the MSCI US Investable Market Index/Information Technology 25/50 index.
It holds over 350 stocks in the Information Technology sector. About 83% of VGT is made up of large-cap stocks.
The technology sector includes software, hardware, computer services, and consumer electronics companies.
What Is the Fidelity Equivalent of VGT?
The Fidelity equivalent of VGT is the Fidelity MSCI Information Technology Index Fund ETF (FTEC).
Comparable to VGT, FTEC follows the MSCI USA IMI Information Technology Index.
This fund consists of over 380 stocks, with the majority in the IT sector.
FTEC’s Top 10 Holdings
| Symbol | Company | Weight |
|---|---|---|
| AAPL | Apple Inc | 24.73 |
| MSFT | Microsoft Corp | 17.95 |
| NVDA | NVIDIA Corp | 3.64 |
| V | Visa Inc Class A | 3.18 |
| MA | Mastercard Inc Class A | 2.73 |
| AVGO | Broadcom Inc | 1.97 |
| CSCO | Cisco Systems Inc | 1.79 |
| ACN | Accenture PLC Class A | 1.76 |
| ADBE | Adobe Inc | 1.70 |
| CRM | Salesforce Inc | 1.48 |
FTEC has an expense ratio of 0.08% (cheaper than VGT by 0.02%) and $5.5 billion in assets under management.
The main difference between FTEC and VGT is cost. You pay less to Fidelity for annual fees while getting the same annualized returns as VGT.
FTEC vs. VGT: What Are the Differences?
1. FTEC is an ETF from Fidelity. VGT is an ETF from Vanguard.
2. The expense ratio for FTEC is 0.08% while the expense ratio of VGT is 0.10%. The fund from Fidelity is slightly cheaper.
3. Fidelity Tech ETF has 7.20 billion in assets under management, while Vanguard Tech ETF has over 56 billion in assets under management.
FTEC vs. VGT: How Are They Similar?
1. FTEC and VGT aim to track the MSCI USA IMI Information Technology Index. Both funds invest at least 80% of their assets in the U.S information technology sector.
2. There is no minimum initial investment for both ETFs. You can even buy fractional shares.
3. FTEC and VGT pay dividends to shareholders on a quarterly basis.
4. When we compared the portfolio of FTEC to VGT, we found that their top 10 holdings are the same.
| COMPANY | SYMBOL | TOTAL NET ASSETS |
|---|---|---|
| Apple Inc. | AAPL | 21.57% |
| Microsoft Corp. | MSFT | 17.65% |
| NVIDIA Corp. | NVDA | 5.40% |
| Visa Inc. Cl A | V | 2.69% |
| Mastercard Inc. | MA | 2.33% |
| Broadcom Inc. | AVGO | 2.01% |
| Adobe Inc. | ADBE | 1.99% |
| Cisco Systems Inc. | CSCO | 1.96% |
| Accenture PLC Cl A | ACN | 1.93% |
| Salesforce Inc. | CRM | 1.83% |
FTEC vs. VGT: 5-Year Performance
| Funds | Fidelity® MSCI Information Technology Index ETF | Vanguard Information Technology Index Fund ETF Shares |
|---|---|---|
| 1 month | +2.61% | +2.60% |
| 3 months | +14.30% | +14.28% |
| 6 months | +15.32% | +15.33% |
| 1 year | +30.40% | +30.38% |
| 3 years | +41.42% | +41.43% |
| 5 years | +31.08% | +31.79% |
Which is Better, FTEC or VGT?
It’s difficult to say. As the comparisons above show, FTEC ETF from Fidelity and VGT ETF from Vanguard track the same underlying index, have the same top ten holdings, and charge comparable fees.
If you’re still undecided about which ETF to invest in, simply choose one.
Diego
Diego, a seasoned financial analyst in New York, brings a decade of expertise to guiding financial decisions. As a blogger for UseFidelity.com, he simplifies finance, offering insights on Fidelity Investments. Beyond numbers, he explores NYC's culture and enjoys capturing moments through his photography.
Choose both but use one of them as a secondary ticker for tax loss harvesting.