XLK vs. IYW: State Street Tech ETF Tops iShares Fund in Cost

Jake Lerch, The Motley Fool

Tue, May 26, 2026 astatine 11:19 AM CDT 5 min read

State Street Technology Select Sector SPDR ETF (NYSEMKT:XLK) provides much cost-efficient entree to tech giants with a higher dividend yield, portion iShares U.S. Technology ETF (NYSEMKT:IYW) offers broader manufacture vulnerability done a larger fig of holdings.

Both funds people the fast-growing exertion sector, yet they disagree successful breadth and ownership cost. The iShares money tracks U.S. exertion equities, offering vulnerability to 139 companies. The SPDR money mirrors the Technology Select Sector Index, specifically representing the S&P 500 tech segment. While some connection dense vulnerability to marketplace leaders, they disagree importantly successful yearly fees.

Snapshot (cost & size)

Beta measures terms volatility comparative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr instrumentality represents full instrumentality implicit the trailing 12 months. Dividend output is the trailing-12-month organisation yield.

The State Street Technology Select Sector SPDR ETF is the much affordable option, with an disbursal ratio 0.30 percent points little than the iShares U.S. Technology ETF. This outgo quality tin interaction semipermanent compounding. For income-focused investors, the SPDR money besides offers a higher payout, yielding 0.40% implicit the trailing 12 months, compared to 0.10% for the iShares fund.

Performance & hazard examination

What's wrong

State Street Technology Select Sector SPDR ETF (NYSEMKT:XLK) focuses exclusively connected the exertion sector, allocating 100.00% to it. The money holds 73 securities, making it a much concentrated play connected large-cap tech. Its largest positions see Nvidia (NASDAQ:NVDA) astatine 15.11%, Apple (NASDAQ:AAPL) astatine 12.16%, and Microsoft (NASDAQ:MSFT) astatine 8.65%. The money was launched successful 1998 and paid $0.76 per stock implicit the trailing 12 months.

Contrastingly, iShares U.S. Technology ETF (NYSEMKT:IYW) has a somewhat broader assemblage reach, with 81.00% successful exertion and 18.00% successful connection services. This inclusion of connection services provides vulnerability to marketplace dynamics antithetic from those of a pure-tech fund. Its largest positions see Nvidia astatine 16.68%, Apple astatine 13.81%, and Alphabet (NASDAQ:GOOGL) astatine 7.46%. It holds 139 securities, providing much diversification crossed smaller firms. It was launched successful 2000 and has a trailing-12-month dividend of $0.27 per share.