Investors seeking exposure to the domestic tech sector often land on one of these two heavyweights: the iShares U.S. Technology ETF (IYW -2.91%) or the Fidelity MSCI Information Technology Index ETF (FTEC -2.89%). Comparing these funds reveals two high-growth vehicles with similar performance but meaningfully different expense ratios and portfolio depth.
Snapshot (cost & size)
| Metric | IYW | FTEC |
|---|---|---|
| Issuer | iShares | Fidelity |
| Expense ratio | 0.38% | 0.08% |
| 1-year return (as of June 12, 2026) | 49.61% | 49.82% |
| Dividend yield | 0.11% | 0.33% |
| Beta | 1.43 | 1.41 |
| AUM | $25.2 billion | $21.4 billion |
Beta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-year return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
FTEC is significantly cheaper with an expense ratio of 0.08% -- which is 0.30 percentage points lower than IYW. FTEC also offers a higher dividend yield of 0.33% vs. just 0.11% for IYW.
Performance & risk comparison
| Metric | IYW | FTEC |
|---|---|---|
| Max drawdown (5 yr) | (39.44%) | (34.95%) |
| Growth of $1,000 over 5 years (total return) | $2,559 | $2,441 |
What's inside
Launched in 2013, FTEC tracks a broad index of tech names, resulting in a deep portfolio of nearly 300 holdings. Its largest positions include Nvidia (NVDA -3.16%) at 16.7%, Apple (AAPL +0.49%) at 14.5%, and Microsoft (MSFT -1.80%) at 9.4%.
By comparison, IYW manages a more concentrated list of 139 holdings, targeting American firms that drive the tech industry. Its largest positions include Nvidia at 14.8%, Apple at 13.5%, and the combined share classes of Alphabet (GOOGL -1.74%) at 12.1%. This fund launched in 2000, giving it a longer track record than FTEC.
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What this means for investors
The better fund between these two options depends on your priorities. If cost efficiency and broader diversification matter most to you, FTEC makes a compelling case: its expense ratio of just 0.08% is one of the lowest available for a sector fund, and owning nearly 300 stocks means less exposure to any single company’s stumbles. For long-term investors who believe that costs compound just as surely as returns do, that 0.30 percentage point annual advantage -- however modest it sounds -- adds up meaningfully over a decade or more.
That said, IYW's slightly stronger five-year cumulative performance is worth acknowledging. Its more concentrated portfolio of 139 holdings can cut both ways -- it amplifies the impact of the fund’s top performers, but also leaves a little less room for error if those names hit turbulence. The fund's longer track record -- dating back to 2000 -- also means investors have more history to evaluate through multiple market cycles, including the dot-com bust, the 2008 financial crisis, and the pandemic-era tech surge.
Both funds share the same mega-cap tech anchors at the top, so the difference in day-to-day performance may feel subtle. But for investors who are cost-conscious or who want exposure to a wider swath of the tech sector, FTEC's deeper bench and lower fee likely make it the more investor-friendly option over the long run.
