XLK's Low Fees Make It the Cheaper Tech ETF

Overview

• State Street’s XLK charges 0.08% versus BlackRock’s IYW at 0.38%, a 0.30 percentage-point gap that erodes returns through compounding over time.
• XLK pays a higher trailing dividend yield near 0.37–0.40% and holds about $116.2 billion in assets, while IYW yields roughly 0.10–0.11% and has about $23.9 billion in AUM.
• XLK is a purer, more concentrated play with 73 holdings all in the technology sector and heavy weights in Nvidia, Apple and Microsoft; IYW holds 139 names and adds roughly 18% exposure to communication-services firms.
• Both ETFs posted similar strong one-year gains recently but differ in five-year drawdowns and concentration-driven volatility, which affects potential downside in market sell-offs.
• The choice comes down to investor priorities: fee-sensitive, long-term compounding and liquidity favor XLK while those seeking broader company coverage and sector diversification may prefer IYW; both funds trace to different index designs and have operated since the late 1990s and 2000s.