# How State Street Technology Select Sector SPDR ETF (XLK) compares with the whole market and its popular alternatives

> Source: BetterThanSPY research, https://betterthanspy.com/research/xlk
> Data as of October 22, 2026. Total returns include reinvested dividends. Past performance does not predict future results; nothing here is investment advice.

Built by QuantCommons' quantitative engine, this page is about relative opportunity, not data on XLK alone. It places XLK (State Street Technology Select Sector SPDR ETF) against 20+ popular alternatives, its neighboring categories and the entire market of over 10,000 U.S.-listed stocks and ETFs, and surfaces what has done better on consistent outperformance, return for the risk taken, behavior in real market crashes and diversification. The result is a clearer view of where XLK stands in the market, and of the alternatives worth a closer look.

Period covered: XLK's full trading record, from December 1998 through September 2026. All returns include reinvested dividends. Data as of October 22, 2026.

## Key findings

- **What you're buying:** 100% of XLK sits in technology, against 38% for the S&P 500.
- **Right now:** Its return over the past 6 months is ahead of 96% of the ETFs with at least $100 million in assets with that much history, rose 15.6% against 8.0% for the S&P 500 and 7.8% for the Nasdaq 100. After a 25.7% loss from February 2025 to April 2025, XLK has bounced 21.4% off the low.
- **Fund or market?:** XLK rose 1.3% over the past 3 months, in line with the S&P 500, which rose 2.5%: a market move, not its own. Its similar funds did not move as one over the past 3 months: VGT (Vanguard Information Technology ETF) rose 2.7%, while SOXX (iShares Semiconductor ETF) fell 14.3%.
- **Long term:** Over the past decade, XLK returned 23.7% a year against 15.3% a year for the S&P 500 (741% in total against 316%). XLK's 10-year return of 741% puts it ahead of 99% of the ETFs with at least $100 million in assets with that much history. The S&P 500 returned 316%.
- **In a crash:** Across seven sell-offs, XLK has typically fallen 1.2 times as far as the S&P 500. The 2022 bear market took 32.4% off XLK, against 24.5% for the S&P 500. That was more than PSCT (Invesco S&P SmallCap Information Technology ETF, 29.6%) but less than VGT (Vanguard Information Technology ETF, 33.6%).
- **Diversification:** XLK is more of the same, not a cushion: a correlation of 0.87 with the S&P 500 over 5 years and 0.86 with the total US market, more closely than 78% of ETFs with at least $100 million in assets.
- **Better options**
  - **Popular alternatives:** IYW (iShares U.S. Technology ETF) was ahead of XLK in most short and long periods.
  - **Whole market:** Few investments have done better on both counts: only 23 of the 3,641 stocks and funds worth at least $500 million earned more than XLK with less volatility over the past 5 years, among them WMT (Walmart), ABBV (AbbVie) and PM (Philip Morris International).

## How much would $10,000 in XLK have grown?

This chart tracks a hypothetical $10,000 investment in XLK over the past 25 years, with dividends reinvested, alongside the same amount in the S&P 500, investments that ended ahead of XLK over the same span and XLK's popular alternatives, among those that traded for the entire period.

- $10,000 invested in XLK at the end of September 2001 would have grown to $273,782 by September 2026, more than the $114,557 it would have become in SPY, an S&P 500 fund.
- Six of the eight other investments on the chart ended ahead of XLK, and SMH finished highest, at $660,531.

## XLK at a glance

This section summarizes the key facts about the fund, its returns over periods from one to ten years and the risk it has carried, with dividends reinvested throughout.

- XLK's deepest decline since it began trading in 1998 was 82.0%, from March 2000 to October 2002. It took about 14 years from the low to climb back to its old high.
- Over 27 full calendar years, XLK's best was 1999, when it returned 65.0%, and its worst was 2000, when it lost 41.9%. It lost money in seven of those years.
- XLK is 9.7% below its all-time high.

- Type: ETF, Technology (Asset Management)
- Trading since: December 22, 1998
- Assets: $125B
- Expense ratio: 0.08%
- Volatility (5 years): 26.1%; Sharpe ratio: 0.80
- Worst decline ever: −82.0%, from March 27, 2000 to October 9, 2002; back at its high by March 1, 2017

| Period | XLK total return |
| --- | --- |
| 1 month | −7.1% |
| 3 months | +1.3% |
| 6 months | +15.6% |
| year to date | +26.8% |
| 1 year | +28.4% |
| 3 years | +126% |
| 5 years | +139% |
| 10 years | +741% |

## XLK against the whole market

Where XLK ranks among every stock and fund, and what across the market has done better.

### How does XLK rank among all ETFs?

This section ranks XLK on return, volatility, risk-adjusted return and worst decline against every ETF worth at least $100 million with enough history.

- XLK's 10-year return ranks in the top 1% of the 958 ETFs with at least $100 million in assets with 10 years of history.
- XLK is among the more volatile ETFs: its price swings rank in the bottom 11% of the 1,563 ETFs with at least $100 million in assets, where the top is the calmest.

| Measure | XLK | Rank |
| --- | --- | --- |
| 1-year return | +28.4% | 197 of 2,488 (top 8%) |
| 3-year return | +126% | 107 of 1,950 (top 6%) |
| 5-year return | +139% | 45 of 1,563 (top 3%) |
| 10-year return | +741% | 9 of 958 (top 1%) |
| Volatility, 5 years | 26.1% | 1,395 of 1,563 (top 90%) |
| Sharpe ratio, 5 years | 0.80 | 337 of 1,563 (top 22%) |
| Worst decline, past 10 years | −33.6% | 273 of 951 (top 29%) |

### What has beaten XLK on both return and risk?

Each dot is an investment, placed by how much it earned a year over the past 5 years (higher is better) and how much its price swung, its volatility (further left is calmer).

- 16 stocks and seven ETFs worth at least $500 million sit in the green region: each earned more than XLK over the past 5 years with smaller price swings. That is fewer than 1% of the 3,641 screened. Few investments beat it on both counts.
- Among those with at least half XLK's swings, CAH has the best return for its risk: 41.7% a year at 24.7% volatility, 5% less than XLK's 26.1%, and a Sharpe ratio (return above cash per unit of volatility) of 1.54 against 0.80 for XLK.

### Is there a better investment than XLK?

The table below lists investments that beat XLK over the past 5 years on at least one of these measures: a higher annual return with lower volatility, a higher annual return at similar volatility, a similar return with lower volatility, a higher Sharpe ratio with a smaller worst decline, a higher total return in most periods from 3 months to 10 years, or smaller losses in recent market crashes, and, for funds, the same exposure at a lower expense ratio.

- Among XLK's popular alternatives, IYW was ahead of XLK in most short and long periods.
- Few investments have done better on both counts: only 23 of the 3,641 stocks and funds worth at least $500 million earned more than XLK with less volatility over the past 5 years, among them WMT, ABBV and PM.

The 15 strongest of 23 investments that beat XLK over the past 5 years, out of 3,641 stocks and funds worth at least $500 million.

| Investment | Group | Annual return (5 years) | Volatility | Sharpe | Worst decline (10 years) | 10Y return | Correlation with XLK | Better on |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| XLK: State Street Technology Select Sector SPDR ETF (this page) |  | +19.0% | 26.1% | 0.80 | −33.6% | +741% |  |  |
| [WELL](https://betterthanspy.com/research/well): Welltower Inc. | Healthcare REITs | +27.0% | 23.8% | 1.13 | −63.3% | +378% | 0.25 | Higher return, lower volatility; Higher return in most periods |
| [CAH](https://betterthanspy.com/research/cah): Cardinal Health, Inc. | Health Care Distribution | +41.7% | 24.7% | 1.54 | −46.1% | +345% | 0.16 | Higher return, lower volatility; Higher return in most periods |
| [PM](https://betterthanspy.com/research/pm): Philip Morris International Inc. | Tobacco | +21.3% | 23.4% | 0.94 | −42.9% | +240% | 0.00 | Higher return, lower volatility; Higher return in most periods |
| [WMT](https://betterthanspy.com/research/wmt): Walmart Inc. | Discount Retail | +21.1% | 22.6% | 0.97 | −25.7% | +521% | 0.20 | Higher return, lower volatility; Higher Sharpe, smaller worst decline |
| [TRV](https://betterthanspy.com/research/trv): The Travelers Companies, Inc. | Property & Casualty Insurance | +22.4% | 22.3% | 1.02 | −46.3% | +360% | -0.02 | Higher return, lower volatility; Higher return in most periods |
| [MFC](https://betterthanspy.com/research/mfc): Manulife Financial Corporation | Life Insurance | +23.3% | 24.0% | 1.00 | −57.5% | +386% | 0.38 | Higher return, lower volatility; Higher return in most periods |
| FLTW: Franklin FTSE Taiwan ETF | International Equity | +21.3% | 24.4% | 0.92 | −38.0% | — | 0.77 | Higher return, lower volatility; Higher return in most periods |
| [MPLX](https://betterthanspy.com/research/mplx): MPLX Lp | Oil & Gas Midstream | +24.0% | 18.8% | 1.25 | −75.2% | +337% | 0.19 | Higher return, lower volatility |
| [ABBV](https://betterthanspy.com/research/abbv): AbbVie Inc. | Specialty Pharmaceuticals | +25.5% | 23.4% | 1.09 | −45.1% | +600% | 0.02 | Higher return, lower volatility |
| DXJ: WisdomTree Japan Hedged Equity Fund | Japan Equity | +26.6% | 19.1% | 1.34 | −39.1% | +415% | 0.42 | Higher return, lower volatility |
| [WMB](https://betterthanspy.com/research/wmb): The Williams Companies, Inc. | Oil & Gas Midstream | +25.2% | 24.1% | 1.06 | −68.1% | +291% | 0.19 | Higher return, lower volatility |
| [BNY](https://betterthanspy.com/research/bny): Bank of New York Mellon Corp | Banks | +22.8% | 24.4% | 0.97 | −50.5% | +332% | 0.44 | Higher return, lower volatility |
| [COR](https://betterthanspy.com/research/cor): Cencora, Inc. | Health Care Distribution | +23.6% | 22.8% | 1.05 | −32.4% | +403% | 0.08 | Higher return, lower volatility |
| [KMI](https://betterthanspy.com/research/kmi): Kinder Morgan, Inc. | Oil & Gas Midstream | +20.1% | 22.3% | 0.94 | −55.1% | +159% | 0.16 | Higher return, lower volatility |
| [CCEP](https://betterthanspy.com/research/ccep): Coca-Cola Europacific Partners PLC | Food & Beverages | +20.4% | 23.3% | 0.92 | −48.8% | +294% | 0.15 | Higher return, lower volatility |

## XLK against its popular alternatives

The investments people most often weigh against XLK, compared period by period and year by year.

### How do XLK's risk and return compare with its alternatives?

This map plots each investment's annual return over the past 5 years against its volatility, the size of its typical price swings.

- None of the 20 popular alternatives earned more than XLK over the past 5 years with smaller price swings, so every higher return on the map came with a bumpier ride.
- 13 of the 20 popular alternatives earned less than XLK over the past 5 years while swinging more, the weaker corner of the map.
- Over the past 5 years, XLK returned 19.0% a year, more than the S&P 500's 12.5%, with higher volatility (26.1% against 17.2%).

### Has XLK consistently beaten its popular alternatives?

This section compares XLK with the investments people most often weigh against it, checking each one over eight periods from one month to ten years.

- Only one of the 22 popular alternatives, IYW, outperformed XLK in at least 3 of 5 short-term and 2 of 3 long-term timeframes.
- TDIV earned more for the risk it took than XLK (a higher Sharpe ratio) and fell less in its worst decline of the past 10 years.

| Investment | 1Y return | 3Y return | 5Y return | 10Y return | Periods ahead of XLK | Verdict | Sharpe |
| --- | --- | --- | --- | --- | --- | --- | --- |
| XLK: State Street Technology Select Sector SPDR ETF (this page) | +28.4% | +126% | +139% | +741% |  |  | 0.80 |
| IYW: iShares U.S. Technology ETF | +26.1% | +138% | +135% | +773% | 3/5 short-term, 2/3 long-term | consistent | 0.78 |
| [SMH](https://betterthanspy.com/research/smh): VanEck Semiconductor ETF | +55.0% | +272% | +304% | +1,570% | 2/5 short-term, 3/3 long-term |  | 0.94 |
| [SOXX](https://betterthanspy.com/research/soxx): iShares Semiconductor ETF | +68.0% | +219% | +221% | +1,297% | 2/5 short-term, 3/3 long-term |  | 0.80 |
| XSD: State Street SPDR S&P Semiconductor ETF | +36.6% | +158% | +121% | +805% | 2/5 short-term, 2/3 long-term |  | 0.59 |
| RSPT: Invesco S&P 500 Equal Weight Technology ETF | +43.0% | +141% | +116% | +559% | 5/5 short-term, 1/3 long-term |  | 0.74 |
| CIBR: First Trust Nasdaq Cybersecurity ETF | +35.2% | +134% | +96.7% | +461% | 5/5 short-term, 1/3 long-term |  | 0.65 |
| PTF: Invesco Dorsey Wright Technology Momentum ETF | +38.5% | +146% | +88.5% | +658% | 3/5 short-term, 1/3 long-term |  | 0.52 |
| [VGT](https://betterthanspy.com/research/vgt): Vanguard Information Technology ETF | +26.7% | +135% | +130% | +753% | 2/5 short-term, 1/3 long-term |  | 0.77 |
| FTEC: Fidelity MSCI Information Technology Index ETF | +26.9% | +136% | +132% | +737% | 2/5 short-term, 1/3 long-term |  | 0.78 |
| IXN: iShares Global Tech ETF | +31.1% | +140% | +137% | +693% | 2/5 short-term, 1/3 long-term |  | 0.79 |
| XNTK: State Street SPDR NYSE Technology ETF | +24.8% | +159% | +115% | +691% | 0/5 short-term, 1/3 long-term |  | 0.67 |
| IGM: iShares Expanded Tech Sector ETF | +23.1% | +149% | +126% | +686% | 0/5 short-term, 1/3 long-term |  | 0.75 |
| FXL: First Trust Technology AlphaDEX Fund | +29.3% | +104% | +66.4% | +514% | 5/5 short-term, 0/3 long-term |  | 0.52 |
| SKYY: First Trust Cloud Computing ETF | +22.2% | +124% | +44.2% | +392% | 4/5 short-term, 0/3 long-term |  | 0.39 |
| IGV: iShares Expanded Tech-Software Sector ETF | −4.2% | +60.5% | +25.5% | +381% | 3/5 short-term, 0/3 long-term |  | 0.30 |
| XSW: State Street SPDR S&P Software & Services ETF | +8.6% | +77.8% | +17.6% | +301% | 3/5 short-term, 0/3 long-term |  | 0.26 |
| PSCT: Invesco S&P SmallCap Information Technology ETF | +40.4% | +92.6% | +63.5% | +275% | 3/5 short-term, 0/3 long-term |  | 0.48 |
| TDIV: First Trust NASDAQ Technology Dividend Index Fund | +16.4% | +118% | +115% | +384% | 2/5 short-term, 0/3 long-term |  | 0.83 |
| [QQQ](https://betterthanspy.com/research/qqq): Invesco QQQ Trust, Series 1 | +16.9% | +101% | +94.0% | +531% | 1/5 short-term, 0/3 long-term |  | 0.69 |
| XLY: State Street Consumer Discretionary Select Sector SPDR ETF | −2.3% | +55.3% | +24.5% | +218% | 1/5 short-term, 0/3 long-term |  | 0.30 |
| XLC: State Street Communication Services Select Sector SPDR ETF | −6.0% | +66.3% | +40.9% | — | 1/5 short-term, 0/3 long-term |  | 0.43 |
| JTEK: JPMorgan U.S. Tech Leaders ETF | +6.9% | +101% | — | — | 0/5 short-term, 0/3 long-term |  | — |

### How did XLK do year by year?

This table shows each investment's total return in every full calendar year since 1999, along with where XLK ranked among its popular alternatives each year.

- Ranked against its popular alternatives each year, XLK finished in the top quarter in eight of 25 years and in the bottom quarter in three. In 2025, it ranked 9 of 22.
- XLK finished ahead of the S&P 500 in 15 of its 27 full calendar years.
- Among its popular alternatives, SMH came out ahead of XLK most often, in 16 of the 25 years both traded.

| Year | XLK | SPY |
| --- | --- | --- |
| 2025 | +24.6% | +17.7% |
| 2024 | +21.6% | +24.9% |
| 2023 | +56.0% | +26.2% |
| 2022 | −27.7% | −18.2% |
| 2021 | +34.8% | +28.7% |
| 2020 | +43.6% | +18.3% |
| 2019 | +49.9% | +31.2% |
| 2018 | −1.7% | −4.6% |
| 2017 | +34.3% | +21.7% |
| 2016 | +15.0% | +12.0% |

## Risk and diversification

How XLK has fallen, how it held up in crashes beside the S&P 500 and its popular alternatives, and what moves independently of it.

### What were XLK's worst declines?

A drawdown is the decline from a peak to the lowest point before a new high.

- In four of XLK's five worst declines, the S&P 500 held up better over the same dates.
- The slowest recovery came after XLK fell 82.0% from March 2000 to October 2002; it did not regain that peak until March 2017, 14 years later.

| Decline | Peak | Low | Back at the high | SPY over the same dates | Market event |
| --- | --- | --- | --- | --- | --- |
| −82.0% | March 27, 2000 | October 9, 2002 | March 1, 2017 | −46.9% | dot-com bust |
| −33.6% | December 27, 2021 | October 12, 2022 | June 15, 2023 | −24.4% | 2022 bear market |
| −31.1% | February 19, 2020 | March 23, 2020 | June 9, 2020 | −33.7% | Covid crash |
| −25.7% | February 19, 2025 | April 8, 2025 | June 12, 2025 | −18.8% |  |
| −23.8% | October 3, 2018 | December 24, 2018 | April 3, 2019 | −19.2% | late-2018 sell-off |

### How did XLK do in stock market crashes?

This section measures how far XLK, the S&P 500 and each alternative fell from peak to trough during every major market crash since 2000.

- None of its popular alternatives fell less than XLK in most of the crashes they both traded through.
- XLK fell further than the S&P 500 in four of the ten crashes it has traded through. The clearest case was the dot-com bust, when XLK fell 82.0% and the S&P 500 fell 47.5%.

| Crash | Dates | XLK fall | SPY fall |
| --- | --- | --- | --- |
| Dot-com bust | March 10, 2000 to October 9, 2002 | −82.0% | −47.5% |
| Global financial crisis | October 9, 2007 to March 9, 2009 | −53.0% | −55.2% |
| Flash crash | May 6, 2010 to May 7, 2010 | −2.1% | −1.5% |
| Euro debt crisis | July 22, 2011 to October 3, 2011 | −15.9% | −17.9% |
| China devaluation & oil rout | August 10, 2015 to February 11, 2016 | −12.7% | −12.8% |
| Volmageddon | February 2, 2018 to February 9, 2018 | −6.7% | −6.5% |
| Q4 2018 selloff | September 21, 2018 to December 24, 2018 | −23.8% | −19.3% |
| COVID crash | February 19, 2020 to March 23, 2020 | −31.1% | −33.7% |
| 2022 bear market | January 4, 2022 to October 12, 2022 | −32.4% | −24.5% |
| SVB / regional bank stress | March 8, 2023 to March 13, 2023 | −3.2% | −3.4% |

### How closely does XLK move with the S&P 500?

Upside capture measures how much of the S&P 500's gains an investment kept in the months the market rose, and downside capture how much of its losses it took in the months the market fell.

- Over the past 10 years, XLK captured 128% of the S&P 500's gains in rising months and 100% of its losses in falling months, with a beta of 1.19. Its share of the market's gains was larger than its share of the losses.
- Only SMH and SOXX had a higher capture ratio (upside capture divided by downside capture) than XLK's 1.28, out of 19 popular alternatives with the same record.

Measured over the past 10 years of monthly returns against SPY.

| Investment | Upside capture | Downside capture | Beta |
| --- | --- | --- | --- |
| XLK: State Street Technology Select Sector SPDR ETF (this page) | 128% | 100% | 1.19 |
| IYW: iShares U.S. Technology ETF | 131% | 104% | 1.21 |
| [SMH](https://betterthanspy.com/research/smh): VanEck Semiconductor ETF | 159% | 108% | 1.46 |
| [SOXX](https://betterthanspy.com/research/soxx): iShares Semiconductor ETF | 156% | 112% | 1.50 |
| XSD: State Street SPDR S&P Semiconductor ETF | 151% | 133% | 1.65 |
| RSPT: Invesco S&P 500 Equal Weight Technology ETF | 125% | 114% | 1.24 |
| CIBR: First Trust Nasdaq Cybersecurity ETF | 99.0% | 79.0% | 0.97 |
| PTF: Invesco Dorsey Wright Technology Momentum ETF | 125% | 103% | 1.38 |
| [VGT](https://betterthanspy.com/research/vgt): Vanguard Information Technology ETF | 130% | 104% | 1.22 |
| IXN: iShares Global Tech ETF | 127% | 102% | 1.20 |
| XNTK: State Street SPDR NYSE Technology ETF | 131% | 108% | 1.30 |
| IGM: iShares Expanded Tech Sector ETF | 131% | 110% | 1.24 |
| FXL: First Trust Technology AlphaDEX Fund | 120% | 111% | 1.22 |
| SKYY: First Trust Cloud Computing ETF | 114% | 114% | 1.13 |
| IGV: iShares Expanded Tech-Software Sector ETF | 112% | 114% | 1.10 |
| XSW: State Street SPDR S&P Software & Services ETF | 110% | 129% | 1.18 |
| PSCT: Invesco S&P SmallCap Information Technology ETF | 108% | 119% | 1.27 |
| TDIV: First Trust NASDAQ Technology Dividend Index Fund | 109% | 108% | 1.07 |
| [QQQ](https://betterthanspy.com/research/qqq): Invesco QQQ Trust, Series 1 | 118% | 102% | 1.13 |
| XLY: State Street Consumer Discretionary Select Sector SPDR ETF | 102% | 125% | 1.18 |

### What diversifies XLK?

Correlation measures how closely two investments move together, on a scale from 1 (in lockstep) through 0 (unrelated) to -1 (in opposite directions).

- Moving a fifth of the money in XLK into GLD would have cut the portfolio's volatility by 18% over the past 5 years while keeping its annual return (+22.2% for XLK alone, +22.2% for the mix).
- Among large ETFs, LVHI, DXJ and EMLP have moved largely independently of XLK over the past 5 years, with correlations of 0.42 or lower, and each still earned a positive 5-year return.
- MCK made money in four of the seven calendar years in which XLK lost money.

| Investment | Correlation with XLK | 5Y return | Volatility | Sharpe | Rose in XLK's 7 down years |
| --- | --- | --- | --- | --- | --- |
| LVHI: Franklin International Low Volatility High Dividend Index ETF | 0.22 | +119% | 11.1% | 1.48 | 1 of 7 |
| DXJ: WisdomTree Japan Hedged Equity Fund | 0.42 | +225% | 19.1% | 1.34 | 1 of 7 |
| EMLP: First Trust North American Energy Infrastructure Fund | 0.28 | +103% | 14.5% | 1.06 | 1 of 7 |
| EWP: iShares MSCI Spain ETF | 0.33 | +141% | 20.3% | 0.97 | 1 of 7 |
| [XLE](https://betterthanspy.com/research/xle): State Street Energy Select Sector SPDR ETF | 0.00 | +178% | 25.5% | 0.94 | 3 of 7 |
| [GLD](https://betterthanspy.com/research/gld): SPDR Gold Shares | 0.03 | +120% | 19.0% | 0.93 | 2 of 7 |
| AMLP: Alerian MLP ETF | 0.19 | +114% | 18.9% | 0.90 | 1 of 7 |
| EFV: iShares MSCI EAFE Value ETF | 0.36 | +89.4% | 15.9% | 0.89 | 0 of 7 |

## Common questions

### What was XLK's worst drawdown?

XLK's deepest decline since it began trading in 1998 was 82.0%, from March 2000 to October 2002. It took about 14 years from the low to climb back to its old high.

### What were XLK's best and worst years?

Over 27 full calendar years, XLK's best year was 1999, when it returned 65.0%. Its worst was 2000, with a return of -41.9%.

### Is there a better investment than XLK?

Among XLK's popular alternatives, IYW was ahead of XLK in most short and long periods. Few investments have done better on both counts: only 23 of the 3,641 stocks and funds worth at least $500 million earned more than XLK with less volatility over the past 5 years, among them WMT, ABBV and PM.

### Is XLK more volatile than the S&P 500?

Yes. XLK's volatility over the past 5 years was 26.1%, 1.5 times the S&P 500's 17.2%. Volatility measures how widely returns swing around their average: in roughly two years out of three, XLK's return lands within 26.1% of its average, either way. The higher it is, the rougher the ride and the harder it is to hold through a slump.

### What is XLK's Sharpe ratio?

XLK's Sharpe ratio over the past 5 years was 0.80, against 0.78 for the S&P 500, so XLK earned more for each unit of risk than an index fund did. The Sharpe ratio is the return earned above cash for each unit of volatility: two investments with the same return are not equal if one got there with far bigger swings.

### How correlated is XLK with the S&P 500?

Over the past 5 years, XLK's monthly returns had a correlation of 0.87 with the S&P 500. Correlation runs from 1 (moving in lockstep) through 0 (unrelated) to −1 (moving in opposite directions). They move almost in lockstep, so holding both adds little diversification. In the table, the correlation column measures each option against XLK instead: the lower it is, the more that option would diversify a XLK holding.

### What are the best alternatives to XLK?

Of the 22 popular alternatives we compared, one outperformed XLK in at least 3 of 5 short-term and 2 of 3 long-term timeframes, with dividends reinvested: IYW.

### Did XLK outperform the S&P 500?

XLK finished ahead of the S&P 500 (SPY) in 15 of 27 full calendar years. In 2025, it returned +24.6%, against +17.7% for the index.

### How did XLK do in stock market crashes?

XLK fell less than the S&P 500 (SPY) in three of the ten major crashes it has traded through, and further in four. The clearest case was the dot-com bust, when XLK fell 82.0% and the S&P 500 fell 47.5%.

### What diversifies XLK?

These had a low correlation with XLK over the past 5 years and still earned a positive 5-year return: among large ETFs, LVHI (correlation 0.22), DXJ (correlation 0.42) and EMLP (correlation 0.28); among large stocks, CAH (correlation 0.16), MCK (correlation -0.03) and MPC (correlation 0.09). A correlation near zero means the two have moved largely independently.

## More research

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- [Schwab U.S. Dividend Equity ETF (SCHD) Performance, Alternatives and Market Rank](https://betterthanspy.com/research/schd)
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- [Apple (AAPL) Performance, Alternatives and Market Rank](https://betterthanspy.com/research/aapl)
- [Alphabet (GOOG) Performance, Alternatives and Market Rank](https://betterthanspy.com/research/goog)
- [Microsoft (MSFT) Performance, Alternatives and Market Rank](https://betterthanspy.com/research/msft)
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- [Vanguard Morningstar Total Stock Market ETF (VTI) Performance, Alternatives and Market Rank](https://betterthanspy.com/research/vti)
- [Taiwan Semiconductor Manufacturing (TSM) Performance, Alternatives and Market Rank](https://betterthanspy.com/research/tsm)

## Explore further

- Full page with charts: https://betterthanspy.com/research/xlk
- All research pages: https://betterthanspy.com/llms.txt
- Compare the entire market against XLK live: https://betterthanspy.com/?b=XLK