FTEC tracks the MSCI USA IMI Information Technology Index, holding 300+ technology companies across large, mid, and small caps in a market-cap-weighted structure. XLK tracks the Technology Select Sector Index, focusing on a subset of S&P 500 technology names with concentration caps that limit the largest holdings and periodically rebalance weights among remaining constituents. FTEC becomes more top-heavy, with its top three holdings representing 44.66% of net assets, including NVIDIA at 17.51%. XLK’s top three represent 39.18%, with NVIDIA capped near 15.5%. The caps reduce exposure to the biggest names and redistribute weight into the next tier, including semiconductor equipment companies, supporting XLK’s stronger YTD results.
"FTEC tracks the MSCI USA IMI Information Technology Index, a pure market-cap-weighted basket spanning 300+ technology companies across large, mid, and small caps. The implicit bet is that broad ownership of the GICS tech sector, weighted strictly by size, captures the category cleanly. XLK tracks the Technology Select Sector Index, a subset of S&P 500 tech names with concentration caps applied by State Street. The bet is narrower: large-cap S&P 500 tech, with rebalancing rules that periodically reshuffle weights among the giants."
"Counterintuitively, FTEC ends up more top-heavy. Its top three (NVIDIA, Apple, Microsoft) account for 44.66% of net assets, with NVIDIA alone at 17.51%. XLK's top three sit at 39.18%, with NVIDIA capped near 15.5%. The concentration caps work against XLK on the way up in the biggest names, but they free weight that gets redistributed into the next tier."
"That redistribution is where XLK's edge in 2026 comes from. XLK's top 10 includes Applied Materials at 2.42% and Lam Research at 2.38%, while FTEC's spot in that range goes to Oracle and IBM. Semiconductor equipment has been the leadership trade. The prospectus shows XLK with 42.11% in Semiconductors & Semiconductor Equipment versus 26.69% in Software. FTEC's broader MSCI IMI net dilutes that semi tilt with mid-cap software and IT services."
Read at 24/7 Wall St.
Unable to calculate read time
Collection
[
|
...
]