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Is State Street SPDR S&P Software & Services ETF (XSW) a Strong ETF Right Now?
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The State Street SPDR S&P Software & Services ETF (XSW - Free Report) was launched on 09/28/2011, and is a smart beta exchange traded fund designed to offer broad exposure to the Technology ETFs category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Managed by State Street Investment Management, XSW has amassed assets over $523.74 million, making it one of the average sized ETFs in the Technology ETFs. Before fees and expenses, XSW seeks to match the performance of the S&P Software & Services Select Industry Index.
The S&P Software & Services Select Industry Index represents the software sub-industry portion of the S&P Total Stock Market Index. The S&P TMI tracks all the U.S. common stocks listed on the NYSE, AMEX, NASDAQ National Market and NASDAQ Global Select Market. The Software Index is a modified equal weight index.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Annual operating expenses for XSW are 0.35%, which makes it one of the least expensive products in the space.
The fund has a 12-month trailing dividend yield of 0.00%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, 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 98% of the portfolio.
When you look at individual holdings, Ptc Inc (PTC) accounts for about 1.11% of the fund's total assets, followed by Rubrik Inc A (RBRK) and Netskope Inc Cl A (NTSK).
Its top 10 holdings account for approximately 9.71% of XSW's total assets under management.
Performance and Risk
So far this year, XSW has added about 11.1%, and is up roughly 4.83% in the last one year (as of 11/04/2026). During this past 52-week period, the fund has traded between $135.97 and $216.15.
The ETF has a beta of 1.18 and standard deviation of 27.18% for the trailing three-year period, making it a high risk choice in the space. With about 133 holdings, it effectively diversifies company-specific risk .
Alternatives
State Street SPDR S&P Software & Services ETF is an excellent option for investors seeking to outperform the Technology ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
Invesco AI and Next Gen Software ETF (IGPT) tracks STOXX WORLD AC NEXGEN SOFTWARE DEV ID and the iShares Expanded Tech-Software Sector ETF (IGV) tracks S&P North American Technology-Software Index. Invesco AI and Next Gen Software ETF has $1.22 billion in assets, iShares Expanded Tech-Software Sector ETF has $13.25 billion. IGPT has an expense ratio of 0.57% and IGV changes 0.38%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Technology ETFs
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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Is State Street SPDR S&P Software & Services ETF (XSW) a Strong ETF Right Now?
The State Street SPDR S&P Software & Services ETF (XSW - Free Report) was launched on 09/28/2011, and is a smart beta exchange traded fund designed to offer broad exposure to the Technology ETFs category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Managed by State Street Investment Management, XSW has amassed assets over $523.74 million, making it one of the average sized ETFs in the Technology ETFs. Before fees and expenses, XSW seeks to match the performance of the S&P Software & Services Select Industry Index.
The S&P Software & Services Select Industry Index represents the software sub-industry portion of the S&P Total Stock Market Index. The S&P TMI tracks all the U.S. common stocks listed on the NYSE, AMEX, NASDAQ National Market and NASDAQ Global Select Market. The Software Index is a modified equal weight index.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Annual operating expenses for XSW are 0.35%, which makes it one of the least expensive products in the space.
The fund has a 12-month trailing dividend yield of 0.00%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, 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 98% of the portfolio.
When you look at individual holdings, Ptc Inc (PTC) accounts for about 1.11% of the fund's total assets, followed by Rubrik Inc A (RBRK) and Netskope Inc Cl A (NTSK).
Its top 10 holdings account for approximately 9.71% of XSW's total assets under management.
Performance and Risk
So far this year, XSW has added about 11.1%, and is up roughly 4.83% in the last one year (as of 11/04/2026). During this past 52-week period, the fund has traded between $135.97 and $216.15.
The ETF has a beta of 1.18 and standard deviation of 27.18% for the trailing three-year period, making it a high risk choice in the space. With about 133 holdings, it effectively diversifies company-specific risk .
Alternatives
State Street SPDR S&P Software & Services ETF is an excellent option for investors seeking to outperform the Technology ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
Invesco AI and Next Gen Software ETF (IGPT) tracks STOXX WORLD AC NEXGEN SOFTWARE DEV ID and the iShares Expanded Tech-Software Sector ETF (IGV) tracks S&P North American Technology-Software Index. Invesco AI and Next Gen Software ETF has $1.22 billion in assets, iShares Expanded Tech-Software Sector ETF has $13.25 billion. IGPT has an expense ratio of 0.57% and IGV changes 0.38%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Technology ETFs
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.