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<h2>Key Points</h2><ul><li>Fidelity MSCI Information Technology Index ETF offers a much lower expense ratio than iShares Semiconductor ETF</li><li>iShares Semiconductor ETF has delivered significantly higher total returns over the last year, but experiences greater price volatility</li><li>Fidelity MSCI Information Technology Index ETF provides broader diversification with 286 holdings compared to the 30 companies held by iShares Semiconductor ETF</li><li>10 stocks we like better than Fidelity Covington Trust - Fidelity Msci Information Technology Index ETF ›</li></ul><p><strong>Fidelity MSCI Information Technology Index ETF</strong> <span class="ticker">(NYSEMKT:FTEC)</span> offers low-cost, broad tech exposure, while <strong>iShares Semiconductor ETF</strong> <span class="ticker">(NASDAQ:SOXX)</span> targets a concentrated, high-volatility bet on the semiconductor industry.</p><p>Investors seeking exposure to the technology sector often choose between broad market funds and specialized industry vehicles. The choice between a diversified information technology fund and a concentrated semiconductor fund involves weighing lower costs and broader reach against the potential for higher volatility and significant industry-specific returns.</p><h2 id="snapshot-cost-amp-size">Snapshot (cost &amp; size)</h2><section><table><tbody><tr><th>Metric</th><th>SOXX</th><th>FTEC</th></tr><tr><td>Issuer</td><td>iShares</td><td>Fidelity</td></tr><tr><td>Expense ratio</td><td>0.34%</td><td>0.08%</td></tr><tr><td>1-yr return (as of May 6, 2026)</td><td>173.10%</td><td>57.90%</td></tr><tr><td>Dividend yield</td><td>0.33%</td><td>0.36%</td></tr><tr><td>AUM</td><td>$33.8 billion</td><td>$17.9 billion</td></tr></tbody></table></section><p><em>The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.</em></p><p>The Fidelity fund offers a significantly lower expense ratio of 0.08% compared to the 0.34% charged by the iShares ETF. While both funds focus on growth, the Fidelity fund provides a slightly higher trailing-12-month distribution yield for income-seeking investors.</p><h2 id="performance-amp-risk-comparison">Performance &amp; risk comparison</h2><section><table><tbody><tr><th>Metric</th><th>SOXX</th><th>FTEC</th></tr><tr><td>Max drawdown (5 yr)</td><td>(45.80%)</td><td>(34.90%)</td></tr><tr><td>Growth of $1,000 over 5 years (total return)</td><td>$3,750</td><td>$2,457</td></tr></tbody></table></section><h2 id="whatx27s-inside">What's inside</h2><p>The <strong>Fidelity MSCI Information Technology Index ETF</strong> <span class="ticker">(NYSEMKT:FTEC)</span> provides exposure to a broad range of technology companies by tracking the MSCI USA IMI Information Technology 25/50 Index. Its portfolio consists of 286 holdings, with its largest positions including <strong>Nvidia Corp</strong> <span class="ticker">(NASDAQ:NVDA)</span> at 18.8%, <strong>Apple Inc</strong> <span class="ticker">(NASDAQ:AAPL)</span> at 14.29%, and <strong>Microsoft Corp</strong> <span class="ticker">(NASDAQ:MSFT)</span> at 9.91%. This Fidelity fund launched in 2013, reports no structural quirks, and paid $0.95 per share in dividends over the trailing 12 months.</p><p>In contrast, the <strong>iShares Semiconductor ETF</strong> <span class="ticker">(NASDAQ:SOXX)</span> maintains a much tighter focus on the semiconductor industry, tracking a specialized index of U.S.-listed equities in that sector. Its portfolio holds 30 companies, and its largest positions include <strong>Micron Technology Inc</strong> <span class="ticker">(NASDAQ:MU)</span> at 9.03%, <strong>Broadcom Inc</strong> <span class="ticker">(NASDAQ:AVGO)</span> at 7.78%, and <strong>Advanced Micro Devices Inc</strong> <span class="ticker">(NASDAQ:AMD)</span> at 7.70%. The fund is 100.00% concentrated in the technology sector. This iShares fund launched in 2001, reports no structural quirks, and has a trailing-12-month dividend of $1.67 per share.</p><p>For more guidance on ETF investing, check out the full guide at this link.</p><h2 id="what-it-means-for-investors">What it means for investors</h2><p>If you want exposure to the 30 largest U.S.-listed semiconductor companies, the SOXX ETF from iShares is hard to beat. By tracking only semiconductors, it’s been a big winner in the AI revolution. The ETF is up by 73% this year.</p><p> If semiconductor-specific exposure isn’t your goal, or you’re just plain nervous about the sustainability of semiconductor demand, Fidelity’s FTEC ETF seems like a better option.</p><p>In addition to a slightly higher dividend yield, FTEC offers a significantly lower expense ratio and a diversified approach for adjusting to industry cycles. This could come in handy if demand for semiconductors stalls. </p><p>If you’re not comfortable with all the volatility that comes with a narrow focus on semiconductors, FTEC looks like the right choice.</p><h2>Should you buy stock in Fidelity Covington Trust - Fidelity Msci Information Technology Index ETF right now?</h2>
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<p style="color: #767676; text-align: left"><em>*Stock Advisor returns as of May 10, 2026. </em></p><p><em>Cory Renauer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Apple, Broadcom, Micron Technology, Microsoft, Nvidia, and iShares Trust - iShares Semiconductor ETF. The Motley Fool has a disclosure policy.</em></p>
<p>The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.</p>
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FTEC

SOXX

<p>The Fidelity MSCI Information Technology Index ETF (FTEC) offers a lower expense ratio of 0.08% compared to the iShares Semiconductor ETF (SOXX) at 0.34%. While SOXX has delivered higher returns over the past year, it also comes with greater volatility. FTEC provides broader diversification with 286 holdings versus SOXX's 30. Investors seeking tech exposure must weigh the benefits of lower costs and diversification against the potential for higher returns in a concentrated sector. FTEC is recommended for those wary of semiconductor market fluctuations.</p>

The Fidelity Tech ETF Offers Lower Fees Broader Reach Than the iShares SOXX