VGT vs. MSFT

Last updated Jun 6, 2026

VGT (Vanguard Information Technology ETF) is Technology Equities fund tracking the MSCI USA IMI Information Technology 25/50 Index, while MSFT (Microsoft Corporation) is a stock. Over the past 10 years, VGT returned 24.81%/yr vs 24.64%/yr for MSFT. A 0.74 correlation means they provide meaningful diversification when combined.

Performance

VGT vs. MSFT - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Vanguard Information Technology ETF (VGT) and Microsoft Corporation (MSFT). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, VGT achieves a 22.48% return, which is significantly higher than MSFT's -13.46% return. Both investments have delivered pretty close results over the past 10 years, with VGT having a 24.81% annualized return and MSFT not far behind at 24.64%.

VGT

• 1D: -6.14%
• 1M: 5.22%
• YTD: 22.48%
• 6M: 20.33%
• 1Y: 49.26%
• 3Y*: 30.47%
• 5Y*: 20.48%
• 10Y*: 24.81%

MSFT

• 1D: -2.66%
• 1M: 0.87%
• YTD: -13.46%
• 6M: -13.38%
• 1Y: -10.20%
• 3Y*: 8.53%
• 5Y*: 11.60%
• 10Y*: 24.64%

*Multi-year figures are annualized to reflect compound growth (CAGR)

VGT vs. MSFT - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
VGT Vanguard Information Technology ETF	22.48%	21.77%	29.30%	52.66%	-29.70%	30.45%	46.04%	48.62%	2.46%	37.08%
MSFT Microsoft Corporation	-13.46%	15.58%	12.93%	58.19%	-28.02%	52.48%	42.53%	57.56%	20.80%	40.73%

Correlation

The correlation between VGT and MSFT is 0.55, which is moderate. They share some common price drivers but move independently often enough to provide real diversification benefit when combined.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.55
Correlation (3Y) Calculated over the trailing 3-year period	0.69
Correlation (5Y) Calculated over the trailing 5-year period	0.78
Correlation (10Y) Calculated over the trailing 10-year period	0.81
Correlation (All Time) Calculated using the full available price history since Feb 2, 2004	0.74

The correlation between VGT and MSFT shifts across timeframes, from 0.55 (1 year) to 0.81 (10 years), reflecting how their relationship changes across market environments.

Return for Risk

VGT vs. MSFT — Risk / Return Rank

Compare risk-adjusted metric ranks to identify better-performing investments over the past 12 months.

VGT

VGT Risk / Return Rank: 63
VGT Sharpe Ratio Rank: 72
VGT Sortino Ratio Rank: 62
VGT Omega Ratio Rank: 65
VGT Calmar Ratio Rank: 62
VGT Martin Ratio Rank: 56

MSFT

MSFT Risk / Return Rank: 26
MSFT Sharpe Ratio Rank: 24
MSFT Sortino Ratio Rank: 22
MSFT Omega Ratio Rank: 22
MSFT Calmar Ratio Rank: 32
MSFT Martin Ratio Rank: 30

The rank (0–100) shows how this investment's returns compare to the risk taken. Higher = better. Based on the past 12 months of data, combining Sharpe, Sortino, and other metrics used by quantitative funds and institutional investors.

VGT vs. MSFT - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard Information Technology ETF (VGT) and Microsoft Corporation (MSFT). Risk-adjusted metrics are performance indicators that assess an investment's returns in relation to its risk, enabling a more accurate comparison of different investment options.

	VGT	MSFT	Difference
Sharpe ratio: Return per unit of total volatility	2.30	-0.41	+2.71
Sortino ratio: Return per unit of downside risk	2.84	-0.40	+3.24
Omega ratio: Gain probability vs. loss probability	1.38	0.95	+0.44
Calmar ratio: Return relative to maximum drawdown	3.02	-0.30	+3.32
Martin ratio: Return relative to average drawdown	9.59	-0.64	+10.22
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

VGT vs. MSFT - Sharpe Ratio Comparison

The current VGT Sharpe Ratio is 2.30, which is higher than the MSFT Sharpe Ratio of -0.41. The chart below compares the historical Sharpe Ratios of VGT and MSFT, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Sharpe Ratios by Period

	VGT	MSFT	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	2.30	-0.41	+2.71
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	0.81	0.44	+0.37
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	1.01	0.91	+0.09
Sharpe Ratio (All Time) Calculated using the full available price history	0.66	0.74	-0.08

Drawdowns

VGT vs. MSFT - Drawdown Comparison

The maximum VGT drawdown since its inception was -54.63%, smaller than the maximum MSFT drawdown of -69.38%. Use the drawdown chart below to compare losses from any high point for VGT and MSFT.

Drawdown Indicators

	VGT	MSFT	Difference
Max Drawdown Largest peak-to-trough decline	-54.63%	-69.38%	+14.75%
Max Drawdown (1Y) Largest decline over 1 year	-16.40%	-33.91%	+17.51%
Max Drawdown (3Y) Largest decline over 3 years	-27.23%	-33.91%	+6.68%
Max Drawdown (5Y) Largest decline over 5 years	-35.07%	-37.15%	+2.08%
Max Drawdown (10Y) Largest decline over 10 years	-35.07%	-37.15%	+2.08%
Current Drawdown Current decline from peak	-8.34%	-22.65%	+14.31%
Average Drawdown Average peak-to-trough decline	-7.95%	-21.78%	+13.83%
Ulcer Index Depth and duration of drawdowns from previous peaks	5.15%	16.07%	-10.92%

Volatility

VGT vs. MSFT - Volatility Comparison

The current volatility for Vanguard Information Technology ETF (VGT) is 9.29%, while Microsoft Corporation (MSFT) has a volatility of 10.32%. This indicates that VGT experiences smaller price fluctuations and is considered to be less risky than MSFT based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	VGT	MSFT	Difference
Volatility (1M) Calculated over the trailing 1-month period	9.29%	10.32%	-1.03%
Volatility (6M) Calculated over the trailing 6-month period	17.37%	22.34%	-4.97%
Volatility (1Y) Calculated over the trailing 1-year period	21.51%	25.25%	-3.74%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	25.31%	26.63%	-1.32%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	24.68%	27.05%	-2.37%

Dividends

VGT vs. MSFT - Dividend Comparison

VGT's dividend yield for the trailing twelve months is around 0.33%, less than MSFT's 0.85% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
MSFT Microsoft Corporation	0.85%	0.70%	0.73%	0.74%	1.06%	0.68%	0.94%	1.20%	1.69%	1.86%	2.37%	2.33%
VGT Vanguard Information Technology ETF	0.33%	0.40%	0.60%	0.65%	0.91%	0.64%	0.82%	1.11%	1.29%	0.99%	1.31%	1.28%

Frequently Asked Questions

Can I hold both VGT and MSFT in my portfolio?

VGT and MSFT have a correlation of 0.55, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, VGT or MSFT?

MSFT has higher volatility (10.32%) compared to VGT (9.29%). In terms of maximum drawdown, VGT dropped -54.63% vs MSFT's -69.38%.

Which has better risk-adjusted returns?

VGT currently has the higher Sharpe Ratio (2.30 vs -0.41), meaning it's delivered slightly more return per unit of risk over the trailing 12 months. However, this ranking shifts over time - use the Risk/Return Score above for a more comprehensive view that combines Sharpe, Sortino, and other measures used by quantitative funds.