The Technology SPDR (XLK) is the biggest name in technology ETFs, with a hefty $11.5 billion in assets under management.
The XLK essentially provides broad exposure to the tech world, holding the 77 technology companies in the S&P 500. Its top five holdings are Apple (AAPL), Microsoft, Google, IBM (IBM) and AT&T (T) — and at respective weightings between 13.1% (AAPL) and 6.35% (IBM), each of the stocks has a significant impact on how the fund performs.
As a note, the fund isn’t wholly comprised of companies that are considered pure-play tech — there are communication stocks like AT&T and Verizon (VZ), as well as financial services stocks like payment processors Visa (V) and MasterCard (MA), though clearly all those companies are heavily technology-based.
Because of the fund’s huge scale, State Street Global Advisors is able to charge dirt-cheap expenses of 0.18%, or $18 of every $10,000 invested. That helps keep more of the returns — roughly 15% on average during the past three years — in investors’ pockets.