What Is XLK? Technology Select Sector SPDR Fund

XLK is the Technology Select Sector SPDR Fund, a passively-managed fund issued by State Street under the SPDR brand that tracks the Technology Select Sector Index. That index is simply the technology slice of the S&P 500: it takes the roughly 500 companies in the S&P 500 and keeps only the ones classified as Information Technology under the GICS system. The result is a fund of about 65 to 70 large-cap technology names, all of them already members of the S&P 500.

Because the universe is limited to the S&P 500's tech names, XLK is a pure large-cap sector play. There are no mid-cap or small-cap technology companies in the fund, and there is nothing outside the technology sector. It launched in December 1998 as one of State Street's original Select Sector funds, and the SPDR sector lineup has been the standard way to buy single-sector exposure in one ticker for over twenty-five years.

Approximate weights as of early 2026; refresh quarterly from State Street SPDR's fund page. Each ticker links to its individual stock guide in Walnut.

XLK is market-cap weighted, so the largest technology companies dominate the top of the fund, and they dominate hard. The top three names (Microsoft, NVIDIA, and Apple) routinely account for more than 40% of the entire fund on their own, and the top 10 holdings sit around 65%. After the megacaps come Broadcom, Oracle, Salesforce, Adobe, AMD, Accenture, and Cisco. See the top-10 table above for current weights.

Two exclusions matter and surprise people. Because XLK follows GICS sector classification, it leaves out three of the largest technology-adjacent companies: Amazon (classified as Consumer Discretionary), Alphabet, and Meta (both classified as Communication Services). So XLK is not broad megacap tech in the way the label suggests. It is concentrated specifically in the pure-tech franchises, and the absence of Amazon, Alphabet, and Meta is a meaningful gap if you wanted exposure to all of big tech.

All three are popular ways to buy technology, but they draw from different universes. XLK (State Street, 0.09%) holds only the technology names inside the S&P 500, roughly 65 to 70 large-caps, which makes it the most top-heavy of the three. VGT (Vanguard, 0.09%) tracks a broader technology index of around 300 names, adding mid-cap and small-cap tech that XLK leaves out, so it is more diversified despite owning the same megacaps at the top. QQQ (Invesco) tracks the Nasdaq-100, about 100 stocks spanning tech plus consumer-facing growth, and it includes Amazon and Tesla that XLK excludes.

In short: XLK is the concentrated large-cap pure-tech play, VGT is the same idea with a wider net down into smaller tech, and QQQ is a broader growth index that happens to be tech-heavy. XLK and VGT share an identical 0.09% fee and their returns have tracked closely, with XLK typically carrying slightly higher volatility because its smaller universe lets the trillion-dollar names dominate further. If you already hold VGT or QQQ, adding XLK buys you concentration in the same megacaps more than a genuinely different exposure.

XLK's return is driven almost entirely by a handful of names. With Microsoft, NVIDIA, and Apple making up more than 40% of the fund, the performance of those three companies effectively sets the performance of XLK. That concentration is a double-edged feature: it has powered strong returns during periods when megacap tech and the AI infrastructure trade led the market, and it cuts the other way, with sharper drawdowns, when those same names fall out of favor.

One thing to understand before buying: XLK is a deliberate, concentrated bet on a single sector, not a diversified holding. It pays a small dividend (around 0.6%) because most of its constituents reinvest rather than distribute, so the case for owning it is growth, not income. Outlook for the fund tracks the outlook for large-cap technology earnings, interest rates, and how richly the market is willing to value the megacaps, none of which is reliably predictable. Judge it as a sector satellite over a full cycle, not as a steady core holding.

XLK is best understood as a sector satellite rather than a core holding. A common structure is a broad market-cap core (something like VOO or VTI) for diversified growth, with a smaller sleeve of XLK layered on top to tilt the portfolio toward technology. Because the fund is so concentrated in a few megacaps, position sizing matters more here than it does for a broad index fund, and many investors keep sector bets like this to a modest slice of the overall portfolio.

Walnut isn't an investment adviser and this isn't a recommendation, but the overlap is worth checking before you buy. If you already own VOO or QQQ, you already hold large positions in Microsoft, NVIDIA, and Apple, and adding XLK stacks more weight onto those same names rather than diversifying away from them. The same is true if you own those megacap tech stocks directly. In conversation, Walnut's AI can show you how much XLK overlaps with what you already hold and where it fits as a satellite around your core.

XLK trades on NYSE Arca during US market hours (9:30am to 4:00pm ET) and is one of the most-traded sector ETFs, with deep liquidity and an active options market. It is available commission-free at every major broker, including Robinhood, Fidelity, Schwab, Public, M1, and Webull. Fractional shares are supported at most modern brokers, which lets you size a tech tilt precisely without committing to a full share, and the quarterly dividend can reinvest automatically (DRIP).

Walnut doesn't replace your broker, it sits on top of it. Connect any major broker and Walnut adds an AI layer that helps you build baskets around XLK, track how your tech sleeve is doing against your targets, and rebalance when your allocation drifts.

ETFs are passive bundles; thematic baskets in Walnut let you concentrate within them. If you hold XLK as a core position, these are the themes you might layer on as satellites.

There are three common ways to get XLK exposure. Buy shares (or fractional shares) of XLK directly at any major broker that lists it. Hold it as a core position and layer more concentrated ideas on top. Or build it into a thematic basket in Walnut, so XLK sits alongside other holdings that express the same thesis, with target weights you can rebalance toward. XLK trades like a stock during market hours, so you buy it the same way you would any listed share.

New to buying funds? See how to buy an ETF, step by step.

Whether XLK is a good buy depends less on any single call and more on your time horizon and what you already hold: it tracks Technology Select Sector, so the real question is whether you want that exposure in your mix and at what weight. We walk through valuation, concentration, and what would have to be true for it to outperform from here in is XLK a buy?

XLK is the concentrated, large-cap-only version of pure-tech exposure, leaning hardest on MSFT, NVDA, and AAPL, where VGT casts a wider net at the same fee. It works as a sector satellite around a broad core, and it stacks rather than diversifies if you already hold VOO, QQQ, or those mega-caps.

Whether XLK is worth buying today depends more on your time horizon and what you already hold than on any single call. We walk through valuation, concentration, and what would have to be true for it to outperform from here in is XLK a buy?

XLK yields ~0.6% as of early 2026, paid by passing through the dividends of its underlying holdings. For the payout schedule, history, and how the distributions are taxed, see XLK dividend: yield and schedule.

VGT and XLK both target US technology, but VGT holds a broader roster including mid and small-cap tech, while XLK covers only the tech names inside the S&P 500 and is more top-heavy. Fees are similar; VGT gives more breadth, XLK more mega-cap concentration. Read the full side-by-side in VGT vs XLK.

New to funds like XLK? Start with what an ETF is, then how to buy an ETF, or browse the full guide to ETF investing.