XLK

Technology Select Sector SPDR Fund (XLK) is an exchange-traded fund that seeks to track the performance of the information technology sector of the U.S. equity market by replicating an index that includes leading technology companies listed on U.S. exchanges. The ETF is managed by State Street Global Advisors and trades under the ticker XLK on NYSE Arca.

Classified as a sector-focused equity ETF, XLK aims to reflect, before fees and expenses, the performance of the technology stocks included in its benchmark index, providing investors with exposure to major U.S. technology companies through a single exchange-traded vehicle.

The fund employs a passive management strategy, maintaining a portfolio that seeks to replicate the composition and weighting of a broad technology index.

XLK’s benchmark is the Technology Select Sector Index, which is composed of companies classified within the information technology sector of the S&P 500. Constituents are weighted by float-adjusted market capitalization and are subject to periodic rebalancing in accordance with index eligibility rules.

Diversification and sector exposure

XLK provides exposure to the U.S. technology sector, with companies operating across segments such as:

• Technology software and services.

• Hardware and infrastructure equipment.

• Semiconductors and technology components.

• IT services and cloud computing.

• Digital platforms.

Structure and costs

Shares of XLK are traded on the secondary market, while creation and redemption of shares are carried out by authorized participants, a mechanism that helps keep the ETF’s market price close to its net asset value (NAV).

The fund carries a competitive expense ratio relative to other sector ETFs and does not charge a performance fee. XLK may distribute income derived from dividends paid by its underlying holdings. However, the ETF is primarily associated with capital appreciation strategies rather than income generation.

History and evolution of the ETF

The Technology Select Sector SPDR Fund was launched in 1998, during a period of expansion in the ETF industry and rising investor interest in sector-based instruments that provide concentrated exposure to technology within the U.S. equity market.

Since its launch, XLK has been widely used by institutional and individual investors seeking access to the core of the U.S. technology market, complementing long-term growth strategies and portfolio diversification.

Between 2020 and 2024, the ETF reflected significant movements in technology markets, including periods of strong appreciation and adjustments amid macroeconomic volatility, tracking trends such as cloud computing, artificial intelligence, and digital transformation across a broad range of industries.