Tech ETFs: XLK Offers Lower Fees While IYW Provides Broader Tech Exposure

1 hour ago 1

Sara Appino, The Motley Fool

Wed, April 29, 2026 astatine 10:32 AM CDT 4 min read

State Street Technology Select Sector SPDR ETF (NYSEMKT:XLK) offers little costs and higher yields, portion iShares U.S. Technology ETF (NYSEMKT:IYW) provides broader vulnerability and includes communications giants similar Alphabet.

Tech investors often take betwixt constrictive assemblage absorption and broader manufacture vulnerability wrong the tech landscape. While some funds people U.S. exertion companies, their underlying scale rules pb to chiseled concentrations. For those evaluating these 2 exertion titans, the prime often hinges connected whether to see the divers integer advertizing and services segments recovered successful the broader tech index.

Snapshot (cost & size)

Metric

XLK

IYW

Issuer	SPDR	iShares
Expense ratio	0.08%	0.38%
1-yr instrumentality (as of April 27, 2026)	54.90%	53.70%
Dividend yield	0.50%	0.10%
Beta	1.30	1.33
AUM	$104.3 billion	$21.4 billion

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 money is much affordable, maintaining an disbursal ratio of 0.08% compared to the 0.38% charged by the iShares fund. Additionally, XLK offers a higher payout with a dividend output of 0.50%.

Performance & hazard examination

Metric

XLK

IYW

Max drawdown (5 yr)	(33.60%)	(39.40%)
Growth of $1,000 implicit 5 years (total return)	$2,353	$2,356

What's wrong

iShares U.S. Technology ETF (NYSEMKT:IYW) holds 139 positions, providing a diversified look astatine the sector. Its portfolio includes exertion astatine 82.00%, connection services astatine 17.00%, and industrials astatine 1.00%. Its largest positions see Nvidia (NASDAQ:NVDA) astatine 17.00%, Apple (NASDAQ:AAPL) astatine 13.67%, and Alphabet (NASDAQ:GOOGL) astatine 7.04%. The inclusion of Alphabet distinguishes this money from competitors that exclude connection services giants. Launched successful 2000, the iShares money has paid $0.27 per stock implicit the trailing 12 months. It tracks a wide scale of home equities and does not employment analyzable strategies oregon leverage.

In contrast, State Street Technology Select Sector SPDR ETF (NYSEMKT:XLK) holds 73 positions and focuses astir exclusively connected exertion astatine 99.00%. Its enactment criteria effect successful a top-heavy operation that reflects the dominance of the astir invaluable tech entities successful the United States. Largest positions see Nvidia (NASDAQ:NVDA) astatine 15.42%, Apple (NASDAQ:AAPL) astatine 12.37%, and Microsoft (NASDAQ:MSFT) astatine 9.98%. This money was launched successful 1998 and has a trailing-12-month dividend of $0.76 per share. Like its counterpart, it features nary antithetic quirks and relies connected the Technology Select Sector Index to supply proxy vulnerability to the largest tech firms successful the S&P 500.