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Should You Invest in the Technology Select Sector SPDR ETF (XLK)?
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If you're interested in broad exposure to the Technology - Broad segment of the equity market, look no further than the Technology Select Sector SPDR ETF (XLK - Free Report) , a passively managed exchange traded fund launched on December 16, 1998.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
Sector ETFs are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Technology - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 3, placing it in top 19%.
Index Details
The fund is sponsored by State Street Investment Management. It has amassed assets over $92.8 billion, making it the largest ETF attempting to match the performance of the Technology - Broad segment of the equity market. XLK seeks to match the performance of the Technology Select Sector Index before fees and expenses.
The Technology Select Sector Index includes companies from the following industries: computers & peripherals; software; diversified telecommunication services; communications equipment; semiconductor & semiconductor equipment; internet software & services; IT services; wireless telecommunication services; electronic equipment & instruments; and office electronics.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.08%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 0.52%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Information Technology sector -- about 100% of the portfolio.
Looking at individual holdings, Nvidia Corp (NVDA) accounts for about 15.5% of total assets, followed by Microsoft Corp (MSFT) and Apple Inc (AAPL).
The top 10 holdings account for about 64.67% of total assets under management.
Performance and Risk
So far this year, XLK has gained about 25.5%, and it's up approximately 28.21% in the last one year (as of 10/09/2025). During this past 52-week period, the fund has traded between $179.73 and $290.69.
The ETF has a beta of 1.21 and standard deviation of 23.88% for the trailing three-year period, making it a medium risk choice in the space. With about 70 holdings, it effectively diversifies company-specific risk.
Alternatives
Technology Select Sector SPDR ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, XLK is a great option for investors seeking exposure to the Technology ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
iShares U.S. Technology ETF (IYW) tracks Dow Jones U.S. Technology Index and the Vanguard Information Technology ETF (VGT) tracks MSCI US Investable Market Information Technology 25/50 Index. iShares U.S. Technology ETF has $21.29 billion in assets, Vanguard Information Technology ETF has $113.44 billion. IYW has an expense ratio of 0.39%, and VGT charges 0.09%.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Should You Invest in the Technology Select Sector SPDR ETF (XLK)?
If you're interested in broad exposure to the Technology - Broad segment of the equity market, look no further than the Technology Select Sector SPDR ETF (XLK - Free Report) , a passively managed exchange traded fund launched on December 16, 1998.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
Sector ETFs are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Technology - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 3, placing it in top 19%.
Index Details
The fund is sponsored by State Street Investment Management. It has amassed assets over $92.8 billion, making it the largest ETF attempting to match the performance of the Technology - Broad segment of the equity market. XLK seeks to match the performance of the Technology Select Sector Index before fees and expenses.
The Technology Select Sector Index includes companies from the following industries: computers & peripherals; software; diversified telecommunication services; communications equipment; semiconductor & semiconductor equipment; internet software & services; IT services; wireless telecommunication services; electronic equipment & instruments; and office electronics.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.08%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 0.52%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Information Technology sector -- about 100% of the portfolio.
Looking at individual holdings, Nvidia Corp (NVDA) accounts for about 15.5% of total assets, followed by Microsoft Corp (MSFT) and Apple Inc (AAPL).The top 10 holdings account for about 64.67% of total assets under management.
Performance and Risk
So far this year, XLK has gained about 25.5%, and it's up approximately 28.21% in the last one year (as of 10/09/2025). During this past 52-week period, the fund has traded between $179.73 and $290.69.
The ETF has a beta of 1.21 and standard deviation of 23.88% for the trailing three-year period, making it a medium risk choice in the space. With about 70 holdings, it effectively diversifies company-specific risk.
Alternatives
Technology Select Sector SPDR ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, XLK is a great option for investors seeking exposure to the Technology ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
iShares U.S. Technology ETF (IYW) tracks Dow Jones U.S. Technology Index and the Vanguard Information Technology ETF (VGT) tracks MSCI US Investable Market Information Technology 25/50 Index. iShares U.S. Technology ETF has $21.29 billion in assets, Vanguard Information Technology ETF has $113.44 billion. IYW has an expense ratio of 0.39%, and VGT charges 0.09%.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.