The tech sector has seen significant stock performance compared to the S&P 500, with ETFs like XLK and QQQ emerging as leaders, both having more than doubled in value over five years. An analysis reveals that while QQQ has higher short-term returns, XLK has better annualized returns over the past decade and a half. XLK's lower expense ratio is an attractive feature, and both ETFs have relatively similar yields. Investors must consider both the historical growth and portfolio allocations between these two leading ETFs when making investment decisions.
The tech sector has produced many stocks that have outperformed the S&P 500, with XLK and QQQ among the top funds, each doubling in five years.
Looking at long-term performance, XLK has delivered a 142% return in five years, slightly ahead of QQQ's 136% return during the same period.
While XLK has a better 0.09% expense ratio versus QQQ's 0.20%, both funds provide low costs and strong historical performance.
Investors should analyze each fund's portfolio allocation and other factors in addition to performance before selecting the right ETF for their stock portfolio.
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