Should You Invest in the SPDR S&P Software & Services ETF (XSW)?

Core Viewpoint - The SPDR S&P Software & Services ETF (XSW) provides broad exposure to the Technology - Software segment, appealing to both retail and institutional investors due to its low costs, transparency, and tax efficiency [1][2]. Group 1: Fund Overview - XSW is a passively managed ETF launched on September 28, 2011, with assets exceeding $477.14 million, categorizing it as an average-sized ETF in its segment [1][3]. - The fund aims to match the performance of the S&P Software & Services Select Industry Index, which represents the software sub-industry of the S&P Total Stock Market Index [3][4]. Group 2: Cost Structure - The ETF has an annual operating expense ratio of 0.35%, making it one of the least expensive options in the market, with a 12-month trailing dividend yield of 0.06% [5]. Group 3: Sector Exposure and Holdings - Approximately 96.8% of XSW's portfolio is allocated to the Information Technology sector, providing diversified exposure [6]. - Bigbear.ai Holdings Inc (BBAI) constitutes about 1.34% of total assets, with the top 10 holdings accounting for approximately 9.46% of total assets under management [7]. Group 4: Performance Metrics - As of August 6, 2025, XSW has experienced a year-to-date loss of about 2.88% but has gained roughly 28.48% over the past year, trading between $141.65 and $204.72 during the last 52 weeks [8]. - The ETF has a beta of 1.18 and a standard deviation of 26.67% over the trailing three-year period, indicating a higher risk profile [8]. Group 5: Alternatives - XSW holds a Zacks ETF Rank of 1 (Strong Buy), indicating strong potential for investors seeking exposure to the Technology ETFs segment [10]. - Alternatives include the Invesco AI and Next Gen Software ETF (IGPT) with $500.03 million in assets and the iShares Expanded Tech-Software Sector ETF (IGV) with $11.36 billion in assets, each with different expense ratios [11].