KNCT vs. XSW

Last updated Aug 2, 2026

KNCT (Invesco Next Gen Connectivity ETF) and XSW (SPDR S&P Software & Services ETF) are both Technology Equities funds - KNCT tracks the STOXX World AC NexGen Connectivity Index while XSW tracks the S&P Software & Services Select Industry Index. Both are passively managed. Over the past 10 years, KNCT returned 18.83%/yr vs 13.43%/yr for XSW. Their 0.76 correlation means they have sometimes moved together and sometimes differently. KNCT charges 0.40%/yr vs 0.35%/yr for XSW.

Performance

KNCT vs. XSW - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Invesco Next Gen Connectivity ETF (KNCT) and SPDR S&P Software & Services ETF (XSW). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, KNCT achieves a 40.12% return, which is significantly higher than XSW's -2.35% return. Over the past 10 years, KNCT has outperformed XSW with an annualized return of 18.83%, while XSW has yielded a comparatively lower 13.43% annualized return.

KNCT

• 1D: 0.08%
• 1M: -4.96%
• 6M: 31.73%
• YTD: 40.12%
• 1Y: 63.92%
• 3Y*: 33.13%
• 5Y*: 16.31%
• 10Y*: 18.83%
• ALL TIME*: 13.22%

XSW

• 1D: 0.60%
• 1M: 3.56%
• 6M: 9.30%
• YTD: -2.35%
• 1Y: 0.97%
• 3Y*: 8.86%
• 5Y*: 1.40%
• 10Y*: 13.43%
• ALL TIME*: 14.98%

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

Liquidity Comparison

Position	Avg. Volume Value (2W)	Avg. Volume Value (1M)	Avg. Volume Value (3M)
KNCT Invesco Next Gen Connectivity ETF	$741.37K	$822.66K	$837.91K
XSW SPDR S&P Software & Services ETF	$8.95M	$8.27M	$10.07M

KNCT vs. XSW - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
KNCT Invesco Next Gen Connectivity ETF	40.12%	28.65%	19.41%	27.39%	-29.54%	21.83%	39.14%	26.35%	5.78%	15.41%
XSW SPDR S&P Software & Services ETF	-2.35%	-0.90%	25.81%	38.60%	-34.22%	7.47%	52.41%	36.50%	7.67%	27.94%

Correlation

The correlation between KNCT and XSW is 0.38, which is low. Their historical price movements had little consistent relationship.

	Correlation
Correlation (1Y) Focuses on recent behavior, but can change the most.	0.38
Correlation (3Y) Balances recent behavior with more history.	0.60
Correlation (5Y) Shows whether the relationship held over a longer period.	0.74
Correlation (10Y) Provides a long-term view across more market conditions.	0.78
Correlation (All Time) Calculated using the full available price history since Sep 29, 2011	0.76

Over the past year, the correlation between KNCT and XSW has dropped to 0.38 - well below their long-term average of 0.76, suggesting their price drivers have been diverging.

KNCT vs. XSW - Sectors Allocation Comparison

Sectors	KNCT	XSW
Technology	86.3%	87.3%
Communication Services	10.0%	3.3%
Real Estate	3.0%	-
Industrials	0.7%	0.7%
Financial Services	0.2%	7.1%
Basic Materials	-	-
Consumer Cyclical	-	0.8%
Consumer Defensive	-	-
Energy	-	-
Healthcare	-	0.8%
Utilities	-	-

Return for Risk

KNCT vs. XSW — Risk / Return Rank

Compare historical risk-adjusted metric ranks over the past 12 months.

KNCT

KNCT Risk / Return Rank: 87
KNCT Sharpe Ratio Rank: 90
KNCT Sortino Ratio Rank: 85
KNCT Omega Ratio Rank: 86
KNCT Calmar Ratio Rank: 85
KNCT Martin Ratio Rank: 88

XSW

XSW Risk / Return Rank: 10
XSW Sharpe Ratio Rank: 10
XSW Sortino Ratio Rank: 10
XSW Omega Ratio Rank: 10
XSW Calmar Ratio Rank: 10
XSW Martin Ratio Rank: 10

The rank (0–100) uses a weighted average of the Sharpe, Sortino, Omega, Calmar, and Martin percentile ranks for the trailing 12 months. Higher means stronger historical risk-adjusted performance within the peer group.

KNCT vs. XSW - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Invesco Next Gen Connectivity ETF (KNCT) and SPDR S&P Software & Services ETF (XSW). 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.

	KNCT	XSW	Difference
Sharpe ratio: Return per unit of total volatility	2.27	-0.08	+2.34
Sortino ratio: Return per unit of downside risk	2.82	0.10	+2.72
Omega ratio: Gain probability vs. loss probability	1.38	1.01	+0.37
Calmar ratio: Return relative to maximum drawdown	3.31	-0.07	+3.38
Martin ratio: Return relative to average drawdown	13.33	-0.13	+13.46

KNCT vs. XSW - Sharpe Ratio Comparison

The current KNCT Sharpe Ratio is 2.27, which is higher than the XSW Sharpe Ratio of -0.08. The chart below compares the historical Sharpe Ratios of KNCT and XSW, 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

KNCT vs. XSW - Drawdown Comparison

The maximum KNCT drawdown since its inception was -57.18%, which is greater than XSW's maximum drawdown of -45.38%. Use the drawdown chart below to compare losses from any high point for KNCT and XSW.

Drawdown Indicators

	KNCT	XSW	Difference
Max Drawdown Largest peak-to-trough decline	-57.18%	-45.38%	-11.80%
Max Drawdown (1Y) Largest decline over 1 year	-18.91%	-33.75%	+14.84%
Max Drawdown (3Y) Largest decline over 3 years	-21.40%	-33.75%	+12.35%
Max Drawdown (5Y) Largest decline over 5 years	-34.55%	-45.38%	+10.83%
Max Drawdown (10Y) Largest decline over 10 years	-34.55%	-45.38%	+10.83%
Current Drawdown Current decline from peak	-14.80%	-10.96%	-3.84%
Average Drawdown Average peak-to-trough decline	-10.73%	-9.90%	-0.83%
Ulcer Index Depth and duration of drawdowns from previous peaks	4.68%	16.92%	-12.24%

Volatility

KNCT vs. XSW - Volatility Comparison

Invesco Next Gen Connectivity ETF (KNCT) has a higher volatility of 11.26% compared to SPDR S&P Software & Services ETF (XSW) at 8.03%. This indicates that KNCT's price experiences larger fluctuations and is considered to be riskier than XSW based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	KNCT	XSW	Difference
Volatility (1M) Calculated over the trailing 1-month period	11.26%	8.03%	+3.23%
Volatility (6M) Calculated over the trailing 6-month period	24.68%	24.75%	-0.07%
Volatility (1Y) Calculated over the trailing 1-year period	27.67%	29.79%	-2.12%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	24.48%	29.15%	-4.67%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	23.55%	26.36%	-2.81%

KNCT vs. XSW - Expense Ratio Comparison

KNCT has a 0.40% expense ratio, which is higher than XSW's 0.35% expense ratio.

Dividends

KNCT vs. XSW - Dividend Comparison

KNCT's dividend yield for the trailing twelve months is around 0.68%, while XSW has not paid dividends to shareholders.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
KNCT Invesco Next Gen Connectivity ETF	0.68%	0.86%	1.38%	0.60%	2.24%	0.55%	0.18%	0.44%	1.22%	0.66%	0.44%	0.00%
XSW SPDR S&P Software & Services ETF	0.00%	0.06%	0.07%	0.20%	0.09%	0.13%	0.26%	0.12%	0.31%	0.46%	0.87%	0.54%

Frequently Asked Questions

Can I hold both KNCT and XSW in my portfolio?

KNCT and XSW have a correlation of 0.38, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, KNCT or XSW?

KNCT has higher volatility (11.26%) compared to XSW (8.03%). In terms of maximum drawdown, KNCT dropped -57.18% vs XSW's -45.38%.

Which ETF is better, KNCT or XSW?

On 10-year performance, KNCT leads with 18.83% vs 13.43% for XSW. On fees, XSW is cheaper at 0.35% per year. On volatility, XSW has been the lower-risk option at 8.03%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, KNCT or XSW?

Over the 10-year period, KNCT has performed better with a 18.83% return vs 13.43%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, KNCT or XSW?

XSW is cheaper with a 0.35% expense ratio, compared with 0.40% for KNCT.

Which ETF pays a higher dividend yield, KNCT or XSW?

KNCT has the higher dividend yield at 0.68%, compared with 0.00% for XSW.

What is the main difference between KNCT and XSW?

KNCT tracks STOXX World AC NexGen Connectivity Index, while XSW tracks S&P Software & Services Select Industry Index. They also come from different issuers: Invesco and State Street. Their fees differ too: 0.40% for KNCT and 0.35% for XSW.

Which has better risk-adjusted returns?

KNCT currently has the higher Sharpe Ratio (2.27 vs -0.08), 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.