Should You Invest in the Technology Select Sector SPDR ETF (XLK)?

Core Viewpoint - The Technology Select Sector SPDR ETF (XLK) is a passively managed ETF that provides broad exposure to the Technology - Broad segment of the equity market, making it a suitable option for long-term investors due to its low costs and transparency [1][2]. Group 1: ETF Overview - XLK was launched on December 16, 1998, and is designed to match the performance of the Technology Select Sector Index [1]. - The fund is sponsored by State Street Investment Management and has over $83.43 billion in assets, making it the largest ETF in its category [3]. - The ETF includes companies from various technology-related industries, such as computers, software, telecommunications, and semiconductors [4]. Group 2: Costs and Performance - The annual operating expenses for XLK are 0.08%, which is considered low in the ETF space, and it has a 12-month trailing dividend yield of 0.59% [5]. - As of August 5, 2025, XLK has gained approximately 13.14% year-to-date and 28.88% over the past year, with a trading range between $179.73 and $264.68 during the last 52 weeks [8]. Group 3: Holdings and Risk - The ETF has a 100% allocation in the Information Technology sector, with Nvidia Corp (NVDA) making up about 15.12% of total assets, followed by Microsoft Corp (MSFT) and Apple Inc (AAPL) [6]. - The top 10 holdings account for approximately 62.78% of total assets under management [7]. - XLK has a beta of 1.23 and a standard deviation of 24.73% over the trailing three-year period, indicating a medium risk profile [8]. Group 4: Alternatives - XLK holds a Zacks ETF Rank of 1 (Strong Buy), indicating strong expected returns and favorable metrics [9]. - Other ETFs in the technology space include iShares U.S. Technology ETF (IYW) and Vanguard Information Technology ETF (VGT), with respective assets of $22.63 billion and $97.70 billion [11].