Vanguard (VGT) vs. Roundhill Investments (CHAT): Which Technology ETF Reigns Supreme?

Key Points
CHAT has delivered a much higher 1-year total return but comes with higher volatility and a steeper drawdown.
VGT remains significantly cheaper on expenses, while CHAT offers a meaningfully higher dividend yield.
VGT is far more diversified, with a larger number of holdings and assets under management, while CHAT focuses on generative AI leaders and applies an ESG screen.
- 10 stocks we like better than Tidal Trust II - Roundhill Generative Ai & Technology ETF ›
Vanguard Information Technology ETF (NYSEMKT:VGT) keeps costs low and spreads risk across more tech stocks, while Roundhill Investments Generative AI & Technology ETF (NYSEMKT:CHAT) charges more, pays a higher yield, and focuses on a narrower slice of AI-related companies with an ESG overlay.
Both Vanguard Information Technology ETF and Roundhill Investments Generative AI & Technology ETF aim to capture growth in technology, but their approaches differ sharply: VGT tracks the broad U.S. tech sector using a passive, diversified strategy, while CHAT is actively managed and zeroes in on companies leading the generative artificial intelligence wave, with a global and ESG-aware lens. This comparison unpacks the trade-offs between broad tech exposure and a concentrated AI bet.
Snapshot (cost & size)
| Metric | VGT | CHAT |
|---|---|---|
| Issuer | Vanguard | Roundhill Investments |
| Expense ratio | 0.09% | 0.75% |
| 1-yr return (as of 2026-03-25) | 24.7% | 76.5% |
| Dividend yield | 0.42% | 2.62% |
| Beta | 2.08 | 3.10 |
| AUM | $126.5 billion | $1.06 billion |
Beta measures price volatility relative to the S&P 500; it is calculated from monthly returns over one year. The one-year return represents total return over the trailing 12 months.
VGT looks much more affordable for long-term holding with its 0.09% annual expense ratio, as CHAT’s 0.75% fee is considerably higher. CHAT offers a higher dividend yield, which may appeal to those seeking a larger payout from their technology exposure.
Performance & risk comparison
| Metric | VGT | CHAT |
|---|---|---|
| Max drawdown (2 years) | (27.23%) | (31.35%) |
What's inside
CHAT is actively managed and invests in 52 companies that Roundhill believes are at the forefront of generative artificial intelligence, with a notable tilt toward technology (73%), communication services (19%), and some consumer cyclical exposure (6%). Top holdings include Alphabet, Nvidia, and Minimax Group, and the fund applies an ESG screen. At just under three years old, CHAT gives concentrated access to AI disruptors rather than the broader tech landscape.
VGT, by contrast, passively tracks the U.S. information technology sector and holds a much wider basket of 310 stocks, allocating heavily to Nvidia, Apple, and Microsoft. VGT is almost entirely focused on technology (98%) and is one of the largest sector ETFs by assets under management, offering more diversification and less thematic risk than a targeted AI play.
For more guidance on ETF investing, check out the full guide at this link.
What this means for investors
Over the last two years, since CHAT debuted on the markets, it has generated annualized total returns of 39%. These returns soar past VGT’s 23% and the S&P 500’s 19% over the same period. Its results have been incredible as the AI-focused ETF burst onto the scene at the perfect time. However, VGT is no slouch. Since 2004, VGT has delivered annualized total returns of 13.8% compared to the S&P 500’s 10.2%, so its long-term track record is exceptional.
While CHAT’s impressive results are certainly worth noting, I’m not positive that it does enough differently from VGT to justify its hefty 0.75% expense ratio. Yes, it could be a great solution for investors seeking exposure to the generative AI theme. However, if you already own an S&P 500 ETF or a tech ETF like VGT or CHAT, it won’t offer dramatic diversification from what you already own. CHAT holds three of the Magnificent Seven in its top 10 holdings, while VGT has four of the Magnificent Seven in its top 10.
That said, VGT allocates 45% of its portfolio to Nvidia, Alphabet, and Microsoft, so investors must be comfortable holding these massive technology names before buying the ETF. Meanwhile, CHAT’s holdings are much more balanced, with its top three positions accounting for only 18% of its portfolio. There is a lot to like about CHAT, but I would just like to give it more time so we can see how it performs during a tech sell-off. Furthermore, I’d like to see whether its 2.62% dividend yield is replicable year in and year out, or if it was just the product of an incredible year in 2025.
Ultimately, I think choosing between the two comes down to an individual investor’s preferences. If you have high risk tolerance and want to swing for the fences, CHAT may be for you, especially as it targets the most revolutionary technology of our time. That said, VGT’s longer track record of stomping the S&P 500’s returns is nothing to be ignored, either -- and its expense ratio is much more reasonable. I personally would choose VGT thanks to its stability and lower costs, but if CHAT’s performance continues for another year or two, it would be hard to deny it as an intriguing ETF, even with its higher fees.
Should you buy stock in Tidal Trust II - Roundhill Generative Ai & Technology ETF right now?
Before you buy stock in Tidal Trust II - Roundhill Generative Ai & Technology ETF, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Tidal Trust II - Roundhill Generative Ai & Technology ETF wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $497,659!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,095,404!*
Now, it’s worth noting Stock Advisor’s total average return is 912% — a market-crushing outperformance compared to 185% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of March 26, 2026.
Josh Kohn-Lindquist has positions in Alphabet and Nvidia. The Motley Fool has positions in and recommends Alphabet, Apple, Microsoft, and Nvidia and is short shares of Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.