XLK vs. QQQ

Last updated Jun 25, 2026

XLK (State Street Technology Select Sector SPDR ETF) and QQQ (Invesco QQQ ETF) are both exchange-traded funds - XLK is a Technology Equities fund tracking the S&P Technology Select Sector Daily Capped 35/20 Index, while QQQ is a Nasdaq-100 fund tracking the NASDAQ-100 Index. Both are passively managed. Over the past 10 years, XLK returned 25.40%/yr vs 22.01%/yr for QQQ. Their correlation of 0.94 suggests significant overlap in exposure. XLK charges 0.08%/yr vs 0.18%/yr for QQQ.

Performance

XLK vs. QQQ - Performance Comparison

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

Returns By Period

In the year-to-date period, XLK achieves a 27.45% return, which is significantly higher than QQQ's 15.95% return. Over the past 10 years, XLK has outperformed QQQ with an annualized return of 25.40%, while QQQ has yielded a comparatively lower 22.01% annualized return.

XLK

• 1D: -0.62%
• 1M: 1.60%
• YTD: 27.45%
• 6M: 25.42%
• 1Y: 48.85%
• 3Y*: 30.34%
• 5Y*: 21.22%
• 10Y*: 25.40%

QQQ

• 1D: -0.42%
• 1M: -0.86%
• YTD: 15.95%
• 6M: 14.16%
• 1Y: 32.28%
• 3Y*: 25.87%
• 5Y*: 15.94%
• 10Y*: 22.01%

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

XLK vs. QQQ - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
XLK State Street Technology Select Sector SPDR ETF	27.45%	24.61%	21.63%	56.02%	-27.73%	34.74%	43.62%	49.86%	-1.68%	34.26%
QQQ Invesco QQQ ETF	15.95%	20.77%	25.58%	54.86%	-32.58%	27.42%	48.62%	38.96%	-0.13%	32.66%

Correlation

The correlation between XLK and QQQ is 0.93, 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	0.93
Correlation (3Y) Calculated over the trailing 3-year period	0.95
Correlation (5Y) Calculated over the trailing 5-year period	0.96
Correlation (10Y) Calculated over the trailing 10-year period	0.96
Correlation (All Time) Calculated using the full available price history since Mar 10, 1999	0.94

The correlation between XLK and QQQ has been stable across timeframes, ranging from 0.93 to 0.96 - a consistent structural relationship.

XLK vs. QQQ - Sectors Allocation Comparison

Sectors	XLK	QQQ
Technology	99.7%	58.7%
Energy	0.2%	0.5%
Industrials	0.1%	2.6%
Basic Materials	-	1.0%
Communication Services	-	14.3%
Consumer Cyclical	-	11.4%
Consumer Defensive	-	6.4%
Financial Services	-	0.2%
Healthcare	-	3.7%
Real Estate	-	0.1%
Utilities	-	1.2%

Return for Risk

XLK vs. QQQ — Risk / Return Rank

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

XLK

XLK Risk / Return Rank: 66
XLK Sharpe Ratio Rank: 73
XLK Sortino Ratio Rank: 63
XLK Omega Ratio Rank: 65
XLK Calmar Ratio Rank: 68
XLK Martin Ratio Rank: 60

QQQ

QQQ Risk / Return Rank: 59
QQQ Sharpe Ratio Rank: 60
QQQ Sortino Ratio Rank: 56
QQQ Omega Ratio Rank: 58
QQQ Calmar Ratio Rank: 61
QQQ Martin Ratio Rank: 61

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.

XLK vs. QQQ - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for State Street Technology Select Sector SPDR ETF (XLK) and Invesco QQQ ETF (QQQ). 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.

	XLK	QQQ	Difference
Sharpe ratio: Return per unit of total volatility	2.10	1.81	+0.28
Sortino ratio: Return per unit of downside risk	2.62	2.41	+0.22
Omega ratio: Gain probability vs. loss probability	1.35	1.32	+0.03
Calmar ratio: Return relative to maximum drawdown	3.08	2.71	+0.37
Martin ratio: Return relative to average drawdown	9.79	10.01	-0.22

XLK vs. QQQ - Sharpe Ratio Comparison

The current XLK Sharpe Ratio is 2.10, which is comparable to the QQQ Sharpe Ratio of 1.81. The chart below compares the historical Sharpe Ratios of XLK and QQQ, 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

XLK vs. QQQ - Drawdown Comparison

The maximum XLK drawdown since its inception was -82.05%, roughly equal to the maximum QQQ drawdown of -82.97%. Use the drawdown chart below to compare losses from any high point for XLK and QQQ.

Drawdown Indicators

	XLK	QQQ	Difference
Max Drawdown Largest peak-to-trough decline	-82.05%	-82.97%	+0.92%
Max Drawdown (1Y) Largest decline over 1 year	-15.92%	-11.96%	-3.96%
Max Drawdown (3Y) Largest decline over 3 years	-25.66%	-22.77%	-2.89%
Max Drawdown (5Y) Largest decline over 5 years	-33.56%	-35.12%	+1.56%
Max Drawdown (10Y) Largest decline over 10 years	-33.56%	-35.12%	+1.56%
Current Drawdown Current decline from peak	-7.54%	-4.66%	-2.88%
Average Drawdown Average peak-to-trough decline	-34.90%	-32.72%	-2.18%
Ulcer Index Depth and duration of drawdowns from previous peaks	5.00%	3.23%	+1.77%

Volatility

XLK vs. QQQ - Volatility Comparison

State Street Technology Select Sector SPDR ETF (XLK) has a higher volatility of 12.50% compared to Invesco QQQ ETF (QQQ) at 9.17%. This indicates that XLK's price experiences larger fluctuations and is considered to be riskier than QQQ based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	XLK	QQQ	Difference
Volatility (1M) Calculated over the trailing 1-month period	12.50%	9.17%	+3.33%
Volatility (6M) Calculated over the trailing 6-month period	19.62%	14.54%	+5.08%
Volatility (1Y) Calculated over the trailing 1-year period	23.47%	17.95%	+5.52%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	25.37%	22.69%	+2.68%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	24.71%	22.41%	+2.30%

XLK vs. QQQ - Expense Ratio Comparison

XLK has a 0.08% expense ratio, which is lower than QQQ's 0.18% expense ratio. Despite the difference, both funds are considered low-cost compared to the broader market, where average expense ratios usually range from 0.3% to 0.9%.

Dividends

XLK vs. QQQ - Dividend Comparison

XLK's dividend yield for the trailing twelve months is around 0.43%, which matches QQQ's 0.43% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
QQQ Invesco QQQ ETF	0.43%	0.45%	0.56%	0.62%	0.80%	0.43%	0.55%	0.74%	0.91%	0.84%	1.06%	0.99%
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 XLK and QQQ in my portfolio?

With a correlation of 0.93, XLK and QQQ 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, XLK or QQQ?

XLK has higher volatility (12.50%) compared to QQQ (9.17%). In terms of maximum drawdown, XLK dropped -82.05% vs QQQ's -82.97%.

Which ETF is better, XLK or QQQ?

On 10-year performance, XLK leads with 25.40% vs 22.01% for QQQ. On fees, XLK is cheaper at 0.08% per year. On volatility, QQQ has been the lower-risk option at 9.17%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, XLK or QQQ?

Over the 10-year period, XLK has performed better with a 25.40% return vs 22.01%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, XLK or QQQ?

XLK is cheaper with a 0.08% expense ratio, compared with 0.18% for QQQ.

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

XLK and QQQ have nearly identical dividend yields, around 0.43%.

What is the main difference between XLK and QQQ?

XLK is categorized as Technology Equities, while QQQ is Nasdaq-100. XLK tracks S&P Technology Select Sector Daily Capped 35/20 Index, while QQQ tracks NASDAQ-100 Index. They also come from different issuers: State Street and Invesco. Their fees differ too: 0.08% for XLK and 0.18% for QQQ.

Which has better risk-adjusted returns?

XLK currently has the higher Sharpe Ratio (2.10 vs 1.81), 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.