FAI vs. XLK

Last updated Jul 15, 2026

FAI (First Trust Bloomberg Artificial Intelligence ETF) and XLK (State Street Technology Select Sector SPDR ETF) are both Technology Equities funds - FAI tracks the Bloomberg Artificial Intelligence Index while XLK tracks the S&P Technology Select Sector Daily Capped 35/20 Index. Both are passively managed. Over the past year, FAI returned 47.82% vs 44.41% for XLK. Their correlation of 0.94 suggests significant overlap in exposure. FAI charges 0.65%/yr vs 0.08%/yr for XLK.

Performance

FAI vs. XLK - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in First Trust Bloomberg Artificial Intelligence ETF (FAI) and State Street Technology Select Sector SPDR ETF (XLK). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

The year-to-date returns for both investments are quite close, with FAI having a 27.54% return and XLK slightly higher at 27.85%.

FAI

• 1D: 2.01%
• 1M: -0.37%
• 6M: 24.40%
• YTD: 27.54%
• 1Y: 47.82%
• 3Y*: —
• 5Y*: —
• 10Y*: —

XLK

• 1D: 1.29%
• 1M: -0.52%
• 6M: 25.66%
• YTD: 27.85%
• 1Y: 44.41%
• 3Y*: 28.63%
• 5Y*: 20.22%
• 10Y*: 24.66%

*Multi-year figures are annualized to reflect compound growth (CAGR)

FAI vs. XLK - Yearly Performance Comparison

	2026 (YTD)	2025	2024
FAI First Trust Bloomberg Artificial Intelligence ETF	27.54%	33.37%	2.28%
XLK State Street Technology Select Sector SPDR ETF	27.85%	24.61%	0.77%

Correlation

The correlation between FAI and XLK is 0.94, indicating a strong positive relationship between their price movements. Combining them offers limited diversification - they tend to fall together during downturns.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.94
Correlation (All Time) Calculated using the full available price history since Nov 21, 2024	0.94

The correlation between FAI and XLK has been stable across timeframes, ranging from 0.94 to 0.94 - a consistent structural relationship.

Return for Risk

FAI vs. XLK — Risk / Return Rank

Compare risk-adjusted metric ranks to identify better-performing investments over the past 12 months.

FAI

FAI Risk / Return Rank: 60
FAI Sharpe Ratio Rank: 65
FAI Sortino Ratio Rank: 57
FAI Omega Ratio Rank: 58
FAI Calmar Ratio Rank: 64
FAI Martin Ratio Rank: 54

XLK

XLK Risk / Return Rank: 66
XLK Sharpe Ratio Rank: 72
XLK Sortino Ratio Rank: 63
XLK Omega Ratio Rank: 64
XLK Calmar Ratio Rank: 71
XLK Martin Ratio Rank: 60

The rank (0–100) shows how this investment's returns compare to the risk taken. Higher = better. Based on the past 12 months of data, combining Sharpe, Sortino, and other metrics used by quantitative funds and institutional investors.

FAI vs. XLK - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for First Trust Bloomberg Artificial Intelligence ETF (FAI) and State Street Technology Select Sector SPDR ETF (XLK). Risk-adjusted metrics are performance indicators that assess an investment's returns in relation to its risk, enabling a more accurate comparison of different investment options.

Values are calculated on a 1-year rolling basis and updated daily. Risk-adjusted metrics are more stable over longer periods — use the period switch above to explore them.

	FAI	XLK	Difference
Sharpe ratio: Return per unit of total volatility	1.70	1.83	-0.13
Sortino ratio: Return per unit of downside risk	2.19	2.33	-0.14
Omega ratio: Gain probability vs. loss probability	1.29	1.31	-0.02
Calmar ratio: Return relative to maximum drawdown	2.55	2.80	-0.25
Martin ratio: Return relative to average drawdown	7.44	8.44	-1.00

FAI vs. XLK - Sharpe Ratio Comparison

The current FAI Sharpe Ratio is 1.70, which is comparable to the XLK Sharpe Ratio of 1.83. The chart below compares the historical Sharpe Ratios of FAI and XLK, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Drawdowns

FAI vs. XLK - Drawdown Comparison

The maximum FAI drawdown since its inception was -27.82%, smaller than the maximum XLK drawdown of -82.05%. Use the drawdown chart below to compare losses from any high point for FAI and XLK.

Drawdown Indicators

	FAI	XLK	Difference
Max Drawdown Largest peak-to-trough decline	-27.82%	-82.05%	+54.23%
Max Drawdown (1Y) Largest decline over 1 year	-18.84%	-15.92%	-2.92%
Max Drawdown (3Y) Largest decline over 3 years	—	-25.66%	—
Max Drawdown (5Y) Largest decline over 5 years	—	-33.56%	—
Max Drawdown (10Y) Largest decline over 10 years	—	-33.56%	—
Current Drawdown Current decline from peak	-9.41%	-7.25%	-2.16%
Average Drawdown Average peak-to-trough decline	-5.50%	-34.84%	+29.34%
Ulcer Index Depth and duration of drawdowns from previous peaks	6.45%	5.27%	+1.18%

Volatility

FAI vs. XLK - Volatility Comparison

First Trust Bloomberg Artificial Intelligence ETF (FAI) has a higher volatility of 11.44% compared to State Street Technology Select Sector SPDR ETF (XLK) at 10.45%. This indicates that FAI's price experiences larger fluctuations and is considered to be riskier than XLK based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	FAI	XLK	Difference
Volatility (1M) Calculated over the trailing 1-month period	11.44%	10.45%	+0.99%
Volatility (6M) Calculated over the trailing 6-month period	23.79%	20.77%	+3.02%
Volatility (1Y) Calculated over the trailing 1-year period	28.22%	24.41%	+3.81%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	31.18%	25.56%	+5.62%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	31.18%	24.79%	+6.39%

FAI vs. XLK - Expense Ratio Comparison

FAI has a 0.65% expense ratio, which is higher than XLK's 0.08% expense ratio.

Dividends

FAI vs. XLK - Dividend Comparison

FAI has not paid dividends to shareholders, while XLK's dividend yield for the trailing twelve months is around 0.43%.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
FAI First Trust Bloomberg Artificial Intelligence ETF	0.00%	0.00%	0.04%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
XLK State Street Technology Select Sector SPDR ETF	0.43%	0.54%	0.66%	0.76%	1.04%	0.65%	0.92%	1.16%	1.60%	1.37%	1.74%	1.79%

Frequently Asked Questions

Can I hold both FAI and XLK in my portfolio?

With a correlation of 0.94, FAI and XLK move almost identically. Holding both adds very little diversification - you're essentially doubling your position in the same market segment. Choosing one is usually more capital-efficient.

Which is riskier, FAI or XLK?

FAI has higher volatility (11.44%) compared to XLK (10.45%). In terms of maximum drawdown, FAI dropped -27.82% vs XLK's -82.05%.

Which ETF is better, FAI or XLK?

On 1-year performance, FAI leads with 47.82% vs 44.41% for XLK. On fees, XLK is cheaper at 0.08% per year. On volatility, XLK has been the lower-risk option at 10.45%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, FAI or XLK?

Over the 1-year period, FAI has performed better with a 47.82% return vs 44.41%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, FAI or XLK?

XLK is cheaper with a 0.08% expense ratio, compared with 0.65% for FAI.

Which ETF pays a higher dividend yield, FAI or XLK?

XLK has the higher dividend yield at 0.43%, compared with 0.00% for FAI.

What is the main difference between FAI and XLK?

FAI tracks Bloomberg Artificial Intelligence Index, while XLK tracks S&P Technology Select Sector Daily Capped 35/20 Index. They also come from different issuers: First Trust and State Street. Their fees differ too: 0.65% for FAI and 0.08% for XLK.

Which has better risk-adjusted returns?

XLK currently has the higher Sharpe Ratio (1.83 vs 1.70), meaning it's delivered slightly more return per unit of risk over the trailing 12 months. However, this ranking shifts over time - use the Risk/Return Score above for a more comprehensive view that combines Sharpe, Sortino, and other measures used by quantitative funds.