"If you want to own a piece of the tech sector without picking individual winners, The Technology Select Sector SPDR Fund ( NYSEARCA:XLK) offers a straightforward solution. With 98.7% of assets concentrated in Information Technology, this ETF essentially delivers pure tech exposure at 8 basis points annually. It solves a specific problem: giving investors direct access to the sector driving innovation and economic growth without the complexity of building a diversified tech portfolio themselves."
"XLK fits portfolios that need aggressive growth exposure anchored by established mega-cap technology companies. The fund concentrates nearly 39% of assets in just three holdings: NVIDIA ( NASDAQ:NVDA | NVDA Price Prediction) at 15.21%, Apple ( NASDAQ:AAPL) at 13.43%, and Microsoft ( NASDAQ:MSFT) at 10.20%. This deliberate concentration strategy amplifies both innovation potential and risk, as the fund essentially rises and falls with strategic decisions made at these three companies."
XLK allocates 98.7% of assets to Information Technology and charges an annual fee of 8 basis points. The ETF concentrates nearly 39% of assets in NVIDIA (15.21%), Apple (13.43%), and Microsoft (10.20%). Semiconductors make up roughly 45% of holdings, positioning the fund as a direct bet on AI and chip manufacturing expansion. The fund returned 17.43% over the past year and 109.39% over five years. XLK outperformed the S&P 500 equivalent (73.63% five-year gain) by over 35 percentage points. The fund offers pure sector exposure with elevated concentration risk.
Read at 24/7 Wall St.
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