XLK vs. QUAL

Last updated Jul 21, 2026

XLK (State Street Technology Select Sector SPDR ETF) and QUAL (iShares MSCI USA Quality Factor 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 QUAL is a Large Cap Blend Equities fund tracking the MSCI USA Sector Neutral Quality Index. Both are passively managed. Over the past 10 years, XLK returned 23.89%/yr vs 13.93%/yr for QUAL. Their correlation of 0.86 suggests significant overlap in exposure. XLK charges 0.08%/yr vs 0.15%/yr for QUAL.

Performance

XLK vs. QUAL - Performance Comparison

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

Returns By Period

In the year-to-date period, XLK achieves a 22.34% return, which is significantly higher than QUAL's 9.65% return. Over the past 10 years, XLK has outperformed QUAL with an annualized return of 23.89%, while QUAL has yielded a comparatively lower 13.93% annualized return.

XLK

• 1D: 0.07%
• 1M: -8.11%
• 6M: 20.96%
• YTD: 22.34%
• 1Y: 35.41%
• 3Y*: 26.73%
• 5Y*: 19.16%
• 10Y*: 23.89%
• ALL TIME*: 10.23%

QUAL

• 1D: -0.43%
• 1M: 0.49%
• 6M: 7.12%
• YTD: 9.65%
• 1Y: 19.00%
• 3Y*: 17.53%
• 5Y*: 11.21%
• 10Y*: 13.93%
• ALL TIME*: 13.60%

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

XLK vs. QUAL - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
XLK State Street Technology Select Sector SPDR ETF	22.34%	24.61%	21.63%	56.02%	-27.73%	34.74%	43.62%	49.86%	-1.68%	34.26%
QUAL iShares MSCI USA Quality Factor ETF	9.65%	12.65%	22.29%	30.88%	-20.50%	26.94%	17.04%	33.89%	-5.70%	22.26%

Correlation

The correlation between XLK and QUAL is 0.74, which is moderate. They share some common price drivers but move independently often enough to provide real diversification benefit when combined.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.74
Correlation (3Y) Calculated over the trailing 3-year period	0.83
Correlation (5Y) Calculated over the trailing 5-year period	0.88
Correlation (10Y) Calculated over the trailing 10-year period	0.86
Correlation (All Time) Calculated using the full available price history since Jul 18, 2013	0.86

The correlation between XLK and QUAL shifts across timeframes, from 0.74 (1 year) to 0.88 (5 years), reflecting how their relationship changes across market environments.

XLK vs. QUAL - Sectors Allocation Comparison

Sectors	XLK	QUAL
Technology	99.1%	40.2%
Communication Services	0.9%	10.3%
Energy	0.2%	2.9%
Industrials	0.1%	7.4%
Basic Materials	-	1.9%
Consumer Cyclical	-	9.0%
Consumer Defensive	-	4.3%
Financial Services	-	10.9%
Healthcare	-	9.2%
Real Estate	-	1.7%
Utilities	-	2.1%

Return for Risk

XLK vs. QUAL — Risk / Return Rank

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

XLK

XLK Risk / Return Rank: 54
XLK Sharpe Ratio Rank: 57
XLK Sortino Ratio Rank: 51
XLK Omega Ratio Rank: 52
XLK Calmar Ratio Rank: 60
XLK Martin Ratio Rank: 52

QUAL

QUAL Risk / Return Rank: 63
QUAL Sharpe Ratio Rank: 64
QUAL Sortino Ratio Rank: 64
QUAL Omega Ratio Rank: 61
QUAL Calmar Ratio Rank: 56
QUAL Martin Ratio Rank: 71

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. QUAL - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for State Street Technology Select Sector SPDR ETF (XLK) and iShares MSCI USA Quality Factor ETF (QUAL). 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	QUAL	Difference
Sharpe ratio: Return per unit of total volatility	1.45	1.57	-0.12
Sortino ratio: Return per unit of downside risk	1.93	2.25	-0.31
Omega ratio: Gain probability vs. loss probability	1.25	1.28	-0.03
Calmar ratio: Return relative to maximum drawdown	2.23	2.11	+0.12
Martin ratio: Return relative to average drawdown	6.53	9.48	-2.95

XLK vs. QUAL - Sharpe Ratio Comparison

The current XLK Sharpe Ratio is 1.45, which is comparable to the QUAL Sharpe Ratio of 1.57. The chart below compares the historical Sharpe Ratios of XLK and QUAL, 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. QUAL - Drawdown Comparison

The maximum XLK drawdown since its inception was -82.05%, which is greater than QUAL's maximum drawdown of -34.06%. Use the drawdown chart below to compare losses from any high point for XLK and QUAL.

Drawdown Indicators

	XLK	QUAL	Difference
Max Drawdown Largest peak-to-trough decline	-82.05%	-34.06%	-47.99%
Max Drawdown (1Y) Largest decline over 1 year	-15.92%	-9.03%	-6.89%
Max Drawdown (3Y) Largest decline over 3 years	-25.66%	-18.00%	-7.66%
Max Drawdown (5Y) Largest decline over 5 years	-33.56%	-28.23%	-5.33%
Max Drawdown (10Y) Largest decline over 10 years	-33.56%	-34.06%	+0.50%
Current Drawdown Current decline from peak	-11.25%	-1.69%	-9.56%
Average Drawdown Average peak-to-trough decline	-34.83%	-4.08%	-30.75%
Ulcer Index Depth and duration of drawdowns from previous peaks	5.43%	2.01%	+3.42%

Volatility

XLK vs. QUAL - Volatility Comparison

State Street Technology Select Sector SPDR ETF (XLK) has a higher volatility of 9.59% compared to iShares MSCI USA Quality Factor ETF (QUAL) at 3.15%. This indicates that XLK's price experiences larger fluctuations and is considered to be riskier than QUAL based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	XLK	QUAL	Difference
Volatility (1M) Calculated over the trailing 1-month period	9.59%	3.15%	+6.44%
Volatility (6M) Calculated over the trailing 6-month period	20.94%	9.78%	+11.16%
Volatility (1Y) Calculated over the trailing 1-year period	24.61%	12.22%	+12.39%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	25.57%	17.38%	+8.19%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	24.81%	18.08%	+6.73%

XLK vs. QUAL - Expense Ratio Comparison

XLK has a 0.08% expense ratio, which is lower than QUAL's 0.15% 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. QUAL - Dividend Comparison

XLK's dividend yield for the trailing twelve months is around 0.45%, less than QUAL's 0.87% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
QUAL iShares MSCI USA Quality Factor ETF	0.87%	0.94%	1.02%	1.23%	1.59%	1.20%	1.39%	1.60%	2.00%	1.76%	1.96%	1.63%
XLK State Street Technology Select Sector SPDR ETF	0.45%	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 QUAL in my portfolio?

XLK and QUAL have a correlation of 0.74, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, XLK or QUAL?

XLK has higher volatility (9.59%) compared to QUAL (3.15%). In terms of maximum drawdown, XLK dropped -82.05% vs QUAL's -34.06%.

Which ETF is better, XLK or QUAL?

On 10-year performance, XLK leads with 23.89% vs 13.93% for QUAL. On fees, XLK is cheaper at 0.08% per year. On volatility, QUAL has been the lower-risk option at 3.15%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, XLK or QUAL?

Over the 10-year period, XLK has performed better with a 23.89% return vs 13.93%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, XLK or QUAL?

XLK is cheaper with a 0.08% expense ratio, compared with 0.15% for QUAL.

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

QUAL has the higher dividend yield at 0.87%, compared with 0.45% for XLK.

What is the main difference between XLK and QUAL?

XLK is categorized as Technology Equities, while QUAL is Large Cap Blend Equities. XLK tracks S&P Technology Select Sector Daily Capped 35/20 Index, while QUAL tracks MSCI USA Sector Neutral Quality Index. They also come from different issuers: State Street and iShares. Their fees differ too: 0.08% for XLK and 0.15% for QUAL.

Which has better risk-adjusted returns?

QUAL currently has the higher Sharpe Ratio (1.57 vs 1.45), 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.