XLC vs XLK: The Most Misunderstood Sector Comparison in Tech Investing
Most investors assume XLC and XLK overlap heavily. They do not. Alphabet and Meta are in XLC, not XLK. Apple, Nvidia, and Microsoft are in XLK, not XLC. Understanding which fund holds what changes everything about how to use them.
XLC (Communication Services Select Sector SPDR Fund) and XLK (Technology Select Sector SPDR Fund) are both heavily weighted toward large technology-adjacent companies, but they track different GICS sectors and hold materially different stocks. XLK holds Apple (~21%), Nvidia (~21%), Microsoft (~17%), Broadcom, and Salesforce — the traditional software and semiconductor names. XLC holds Meta (~22%), Alphabet (~20%), Netflix, T-Mobile, Comcast, and Walt Disney — media, telecom, and online platforms. The key fact almost everyone misses: Alphabet (Google) and Meta (Facebook) are in XLC because GICS classifies them as Communication Services, not Technology. They are not in XLK at all. This means XLK and XLC have very little overlap and serve as complements, not substitutes. Both charge 0.09%. If you want AI and semiconductor exposure, XLK. If you want online advertising, streaming, and platform businesses, XLC.
Whether the lower-cost fund suits your situation depends on your existing holdings, account type, tax situation, and how you use each fund. This is a cost comparison, not a personalized recommendation.
Both funds trade commission-free at every major brokerage. How the major brokerages compare →
📋 XLC vs XLK — Key Facts Side by Side
| Metric | XLC | XLK |
|---|---|---|
| Fund Name | State Street Communication Services Select Sector SPDR ETF | State Street Technology Select |
| Issuer | SPDR | SPDR |
| Tracks Index | Communication Services Select Sector Index | Technology Select Sector Index |
| Expense Ratio | 0.09% | 0.09% |
| Cost per $10K/yr | $9.00 | $9.00 |
| AUM | $22.3B | $123.9B |
| Holdings | 24 | 68 |
| Inception | 2018 | 1998 |
| 1-Year Return | +0.43% | +36.72% |
| 3-Year Return | +17.01% | +26.30% |
| 5-Year Return | +6.37% | +18.92% |
| Dividend Yield | 1.33% | 0.42% |
| Holdings Overlap | See holdings overlap → | |
| Avg Bid-Ask Spread | 0.01% | 0.01% |
Expense ratio, AUM, and returns updated Aug 1, 2026 from ETF BFF database. Returns are annualised. Not investment advice.
📊 XLC vs XLK — Annualised Returns
Annualised returns (trailing, price-based). Past performance does not guarantee future results.
🎯 Which Fund Fits Which Investor?
- want the specific exposure defined by the Communication Services Select Sector Index
- want broader diversification (68 holdings vs 24)
💰 What the Fee Difference Actually Costs
Adjust the numbers for your situation. This models each fund's expense ratio compounding against your balance over time.
Assumes a constant annual return reinvested, with each fund's expense ratio deducted yearly. Illustrative only; actual returns vary. Past performance does not guarantee future results.
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❓ XLC vs XLK — Frequently Asked Questions
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