Technology Select Sector SPDR Fund’s 71-Stock Portfolio, Lower Fees Outperform VGT by 31.8% in Past Year
XLK comprises 71 technology stocks and charges marginally lower fees than Vanguard’s VGT, offering a more concentrated portfolio. The ETF has declined 4.8% over the past three months, dropped 5% year-to-date but posted a 31.8% gain over the last 52 weeks, surpassing VGT’s recent performance.
1. Fund Overview
The Technology Select Sector SPDR Fund (XLK) tracks the Technology Select Sector Index and holds 71 large-cap technology companies. It offers a more concentrated exposure than broader tech ETFs and charges marginally lower fees than Vanguard’s Information Technology ETF, appealing to investors seeking cost efficiency.
2. Performance Comparison
Over the past three months, XLK has dipped 4.8% and is down 5% year-to-date, yet it achieved a 31.8% gain over the last 52 weeks. This performance outpaces Vanguard’s VGT, which has lagged XLK in recent years despite its broader 320-stock diversification.
3. Investor Considerations
XLK’s concentration in 71 names can amplify returns when its top holdings rally but also increases sector-specific risk. Investors must weigh the trade-off between higher return potential from concentration and the diversification benefits offered by larger-holding ETFs like VGT.