Technology Select Sector SPDR Fund (XLK): Complete Beginner's Guide
Last updated: March 2026 • State Street Global Advisors • Technology Sector
Expense Ratio
0.09%
AUM
$65.0B
Dividend Yield
0.70%
Inception
1998
Beginner Score
8/10
What is Technology Select Sector SPDR Fund?
XLK provides exposure to the technology companies in the S&P 500 index, making it one of the most popular and liquid tech sector ETFs available. It is more concentrated than VGT, holding only S&P 500 tech names rather than a broader universe. Beginners should understand that XLK's lower holding count means it is more heavily weighted toward the very largest tech stocks like Apple and Microsoft.
XLK is managed by State Street Global Advisors and has been available since 1998. With $65.0B in assets under management, it's a well-established fund with strong institutional backing. The fund charges an expense ratio of 0.09%, which means for every $10,000 you invest, you pay approximately $9 per year in management fees.
XLK at a Glance — Key Metrics
| Expense Ratio | 0.09% |
| Total Holdings | 65 |
| P/E Ratio | 33.2 |
| Beta | 1.20 |
| Dividend Yield | 0.70% |
| AUM | $65.0B |
| Inception Year | 1998 |
| Issuer | State Street Global Advisors |
Top 10 Holdings in XLK
XLK holds 65 different securities. Here are the largest positions that make up the core of this fund:
| # | Company | Ticker | Weight |
|---|---|---|---|
| 1 | Apple Inc. | AAPL | 15.80% |
| 2 | Microsoft Corp. | MSFT | 14.50% |
| 3 | NVIDIA Corp. | NVDA | 13.80% |
| 4 | Broadcom Inc. | AVGO | 5.20% |
| 5 | Salesforce Inc. | CRM | 2.50% |
| 6 | Adobe Inc. | ADBE | 2.30% |
| 7 | Advanced Micro Devices Inc. | AMD | 2.20% |
| 8 | Accenture PLC | ACN | 2.00% |
| 9 | Intuit Inc. | INTU | 1.90% |
| 10 | Cisco Systems Inc. | CSCO | 1.80% |
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XLK Performance History
Here's how XLK has performed over different time periods. Remember that past performance doesn't guarantee future results, but it gives you a sense of the fund's track record:
YTD
3.60%
1 Year
33.20%
3 Year
14.80%
5 Year
21.80%
10 Year
20.20%
Beginner Suitability Score: 8/10
Our proprietary Beginner Suitability Score evaluates ETFs based on five factors that matter most to new investors: fees, volatility, diversification, dividend history, and track record length.
XLK scores 8/10 because it has very low fees, can be more volatile than the broader market, focuses on 65 selected holdings, and has been available since 1998, giving it a proven track record.
How to Buy XLK — Step by Step
- Open a brokerage account — We recommend Fidelity, Charles Schwab, or Vanguard for ETF investing. All offer $0 commissions on ETF trades.
- Fund your account — Transfer money from your bank. You can start with as little as $1 if your broker offers fractional shares.
- Search for "XLK" — Use the search bar in your brokerage platform to find Technology Select Sector SPDR Fund.
- Place your order — Choose "Market Order" for simplicity or "Limit Order" if you want to set a specific price. Enter how many shares (or dollar amount) you want to buy.
- Set up automatic investing — Most brokers let you schedule recurring purchases (e.g., $100/month on the 1st). This is dollar cost averaging in action.
Dollar Cost Averaging Into XLK
Here's what consistent monthly investing could look like over time, assuming an average annual return of 8% (approximate historical stock market average):
| Monthly | 10 Years | 20 Years | 30 Years |
|---|---|---|---|
| $100/mo | $18,417 | $59,295 | $150,030 |
| $250/mo | $46,041 | $148,237 | $375,074 |
| $500/mo | $92,083 | $296,474 | $750,148 |
*Projections assume 8% average annual return with monthly compounding. Actual returns will vary. Past performance doesn't guarantee future results.
Fee impact: With XLK's expense ratio of 0.09%, a $10,000 investment would lose approximately $771 to fees over 20 years compared to a zero-fee investment. This is a reasonable fee level for the value provided.
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Pros and Cons of XLK
Pros
- ✓One of the most heavily traded sector ETFs with extremely tight bid-ask spreads
- ✓Low 0.09% expense ratio provides cheap access to the S&P 500 technology sector
- ✓Excellent options market makes it versatile for hedging and income strategies
- ✓Long track record since 1998 gives investors decades of performance history
Cons
- ✗Even more concentrated than VGT, with the top three holdings exceeding 44% of assets
- ✗Fewer holdings than VGT means less diversification across smaller tech companies
- ✗High valuations in the tech sector make it vulnerable to sharp corrections
XLK vs Similar ETFs
See how XLK stacks up against similar funds:
Frequently Asked Questions
Is XLK a good ETF for beginners?▾
XLK has a Beginner Suitability Score of 8/10 on our scale. This makes it a strong choice for new investors due to its low fees and focused strategy.
What is the expense ratio of XLK?▾
XLK has an expense ratio of 0.09%. This means for every $10,000 you invest, you pay approximately $9 per year in fees. This is considered very low and cost-efficient.
How much money do I need to invest in XLK?▾
You can invest in XLK with as little as $1 through brokers that offer fractional shares (like Fidelity, Schwab, or Robinhood). There is no minimum investment required beyond the share price itself, which changes daily. Dollar cost averaging — investing a fixed amount regularly — is a popular strategy.
Does XLK pay dividends?▾
Yes, XLK pays dividends with a current yield of approximately 0.70%. Dividends are typically paid quarterly and can be reinvested automatically through most brokers.
What are the top holdings in XLK?▾
The top holdings in XLK include Apple Inc. (15.80%), Microsoft Corp. (14.50%), NVIDIA Corp. (13.80%), and more. The fund holds 65 total positions, providing focused exposure to selected companies.