IYM vs. XLK

Last updated Jun 5, 2026

IYM (iShares U.S. Basic Materials ETF) and XLK (State Street Technology Select Sector SPDR ETF) are both exchange-traded funds - IYM is a Materials fund tracking the Dow Jones U.S. Basic Materials Index, while XLK is a Technology Equities fund tracking the S&P Technology Select Sector Daily Capped 35/20 Index. Both are passively managed. Over the past 10 years, IYM returned 10.92%/yr vs 25.62%/yr for XLK. A 0.59 correlation means they provide meaningful diversification when combined. IYM charges 0.42%/yr vs 0.08%/yr for XLK.

Performance

IYM vs. XLK - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in iShares U.S. Basic Materials ETF (IYM) and State Street Technology Select Sector SPDR ETF (XLK). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, IYM achieves a 22.18% return, which is significantly lower than XLK's 34.34% return. Over the past 10 years, IYM has underperformed XLK with an annualized return of 10.92%, while XLK has yielded a comparatively higher 25.62% annualized return.

IYM

• 1D: 0.10%
• 1M: 3.09%
• YTD: 22.18%
• 6M: 27.03%
• 1Y: 37.82%
• 3Y*: 16.01%
• 5Y*: 7.84%
• 10Y*: 10.92%

XLK

• 1D: -1.56%
• 1M: 16.63%
• YTD: 34.34%
• 6M: 33.10%
• 1Y: 64.08%
• 3Y*: 33.46%
• 5Y*: 23.44%
• 10Y*: 25.62%

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

IYM vs. XLK - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
IYM iShares U.S. Basic Materials ETF	22.18%	20.41%	-4.54%	12.83%	-9.15%	25.62%	17.87%	19.22%	-16.63%	24.83%
XLK State Street Technology Select Sector SPDR ETF	34.34%	24.61%	21.63%	56.02%	-27.73%	34.74%	43.62%	49.86%	-1.68%	34.26%

Correlation

The correlation between IYM and XLK is 0.43, which is low. Their price movements are largely independent, making them effective diversification partners.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.43
Correlation (3Y) Calculated over the trailing 3-year period	0.45
Correlation (5Y) Calculated over the trailing 5-year period	0.54
Correlation (10Y) Calculated over the trailing 10-year period	0.56
Correlation (All Time) Calculated using the full available price history since Jun 21, 2000	0.59

The correlation between IYM and XLK shifts across timeframes, from 0.43 (1 year) to 0.59 (all time), reflecting how their relationship changes across market environments.

IYM vs. XLK - Sectors Allocation Comparison

Sectors	IYM	XLK
Basic Materials	85.4%	-
Industrials	11.4%	0.1%
Consumer Cyclical	3.2%	-
Communication Services	-	-
Consumer Defensive	-	-
Energy	-	0.2%
Financial Services	-	-
Healthcare	-	-
Real Estate	-	-
Technology	-	99.7%
Utilities	-	-

Return for Risk

IYM vs. XLK — Risk / Return Rank

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

IYM

IYM Risk / Return Rank: 59
IYM Sharpe Ratio Rank: 62
IYM Sortino Ratio Rank: 58
IYM Omega Ratio Rank: 56
IYM Calmar Ratio Rank: 58
IYM Martin Ratio Rank: 60

XLK

XLK Risk / Return Rank: 82
XLK Sharpe Ratio Rank: 90
XLK Sortino Ratio Rank: 85
XLK Omega Ratio Rank: 83
XLK Calmar Ratio Rank: 79
XLK Martin Ratio Rank: 73

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.

IYM vs. XLK - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for iShares U.S. Basic Materials ETF (IYM) 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.

	IYM	XLK	Difference
Sharpe ratio: Return per unit of total volatility	2.04	3.09	-1.05
Sortino ratio: Return per unit of downside risk	2.71	3.77	-1.06
Omega ratio: Gain probability vs. loss probability	1.34	1.49	-0.15
Calmar ratio: Return relative to maximum drawdown	2.79	4.04	-1.25
Martin ratio: Return relative to average drawdown	10.62	13.55	-2.92
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

IYM vs. XLK - Sharpe Ratio Comparison

The current IYM Sharpe Ratio is 2.04, which is lower than the XLK Sharpe Ratio of 3.09. The chart below compares the historical Sharpe Ratios of IYM 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.

Sharpe Ratios by Period

	IYM	XLK	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	2.04	3.09	-1.05
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	0.39	0.95	-0.56
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	0.50	1.05	-0.54
Sharpe Ratio (All Time) Calculated using the full available price history	0.34	0.41	-0.08

Drawdowns

IYM vs. XLK - Drawdown Comparison

The maximum IYM drawdown since its inception was -67.78%, smaller than the maximum XLK drawdown of -82.05%. Use the drawdown chart below to compare losses from any high point for IYM and XLK.

Drawdown Indicators

	IYM	XLK	Difference
Max Drawdown Largest peak-to-trough decline	-67.78%	-82.05%	+14.27%
Max Drawdown (1Y) Largest decline over 1 year	-13.61%	-15.92%	+2.31%
Max Drawdown (3Y) Largest decline over 3 years	-23.62%	-25.66%	+2.04%
Max Drawdown (5Y) Largest decline over 5 years	-29.94%	-33.56%	+3.62%
Max Drawdown (10Y) Largest decline over 10 years	-42.76%	-33.56%	-9.20%
Current Drawdown Current decline from peak	-0.78%	-2.54%	+1.76%
Average Drawdown Average peak-to-trough decline	-11.45%	-34.95%	+23.50%
Ulcer Index Depth and duration of drawdowns from previous peaks	3.57%	4.74%	-1.17%

Volatility

IYM vs. XLK - Volatility Comparison

The current volatility for iShares U.S. Basic Materials ETF (IYM) is 6.34%, while State Street Technology Select Sector SPDR ETF (XLK) has a volatility of 7.27%. This indicates that IYM experiences smaller price fluctuations and is considered to be less risky than XLK based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	IYM	XLK	Difference
Volatility (1M) Calculated over the trailing 1-month period	6.34%	7.27%	-0.93%
Volatility (6M) Calculated over the trailing 6-month period	14.85%	16.76%	-1.91%
Volatility (1Y) Calculated over the trailing 1-year period	18.64%	20.86%	-2.22%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	20.37%	24.90%	-4.53%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	21.70%	24.49%	-2.79%

IYM vs. XLK - Expense Ratio Comparison

IYM has a 0.42% expense ratio, which is higher than XLK's 0.08% expense ratio.

Dividends

IYM vs. XLK - Dividend Comparison

IYM's dividend yield for the trailing twelve months is around 1.24%, more than XLK's 0.40% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
IYM iShares U.S. Basic Materials ETF	1.24%	1.51%	1.65%	1.77%	2.14%	1.48%	1.39%	2.08%	1.68%	1.43%	1.47%	2.04%
XLK State Street Technology Select Sector SPDR ETF	0.40%	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 IYM and XLK in my portfolio?

IYM and XLK have a correlation of 0.43, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, IYM or XLK?

XLK has higher volatility (7.27%) compared to IYM (6.34%). In terms of maximum drawdown, IYM dropped -67.78% vs XLK's -82.05%.

Which ETF is better, IYM or XLK?

On 10-year performance, XLK leads with 25.62% vs 10.92% for IYM. On fees, XLK is cheaper at 0.08% per year. On volatility, IYM has been the lower-risk option at 6.34%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, IYM or XLK?

Over the 10-year period, XLK has performed better with a 25.62% return vs 10.92%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, IYM or XLK?

XLK is cheaper with a 0.08% expense ratio, compared with 0.42% for IYM.

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

IYM has the higher dividend yield at 1.24%, compared with 0.40% for XLK.

What is the main difference between IYM and XLK?

IYM is categorized as Materials, while XLK is Technology Equities. IYM tracks Dow Jones U.S. Basic Materials Index, while XLK tracks S&P Technology Select Sector Daily Capped 35/20 Index. They also come from different issuers: iShares and State Street. Their fees differ too: 0.42% for IYM and 0.08% for XLK.

Which has better risk-adjusted returns?

XLK currently has the higher Sharpe Ratio (3.09 vs 2.04), 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.