Core Insights - The article compares two leading technology ETFs: State Street Technology Select Sector SPDR ETF (XLK) and iShares US Technology ETF (IYW), highlighting their differences in cost, yield, and sector focus [1][2]. Cost & Size Comparison - XLK has a lower expense ratio of 0.08% compared to IYW's 0.38%, making it more affordable for long-term investors [3][4]. - As of December 12, 2025, the one-year return for IYW is 20.8% while XLK is at 20.7% [3]. - XLK offers a higher dividend yield of 0.5% compared to IYW's 0.1% [10]. - Assets Under Management (AUM) for XLK is $95.6 billion, while IYW has $21.4 billion, indicating XLK's greater liquidity [3][11]. Performance & Risk Comparison - Over the past five years, IYW experienced a maximum drawdown of 39.43%, while XLK had a lower drawdown of 33.55% [5]. - The growth of a $1,000 investment over five years would yield $2,413 for IYW and $2,303 for XLK [5]. Holdings & Sector Focus - XLK focuses on the S&P 500's technology sector with 72 stocks, heavily weighted towards industry giants like Nvidia (13.71%), Apple (12.82%), and Microsoft (11.16%) [6]. - IYW holds 142 stocks, providing broader exposure including communication services, with top holdings of Nvidia (15.46%), Apple (15.42%), and Microsoft (13.44%) [7]. Investor Considerations - Both ETFs have similar performance and holdings, but XLK's lower costs and higher yield may appeal more to cost-conscious investors [8][12].
XLK vs. IYW: Which is the Better Choice for Tech-Focused Investors?
The Motley Fool·2025-12-21 03:11