XLK vs. XLF

Last updated Jun 4, 2026

XLK (State Street Technology Select Sector SPDR ETF) and XLF (State Street Financial Select Sector SPDR 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 XLF is a Financials Equities fund tracking the Financial Select Sector Index. Both are passively managed. Over the past 10 years, XLK returned 25.84%/yr vs 12.38%/yr for XLF. A 0.59 correlation means they provide meaningful diversification when combined. Both charge a 0.08% expense ratio.

Performance

XLK vs. XLF - Performance Comparison

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

Returns By Period

In the year-to-date period, XLK achieves a 36.47% return, which is significantly higher than XLF's -6.64% return. Over the past 10 years, XLK has outperformed XLF with an annualized return of 25.84%, while XLF has yielded a comparatively lower 12.38% annualized return.

XLK

• 1D: -1.00%
• 1M: 21.09%
• YTD: 36.47%
• 6M: 35.71%
• 1Y: 66.93%
• 3Y*: 33.90%
• 5Y*: 23.83%
• 10Y*: 25.84%

XLF

• 1D: -1.15%
• 1M: -1.38%
• YTD: -6.64%
• 6M: -4.18%
• 1Y: 1.13%
• 3Y*: 17.64%
• 5Y*: 7.61%
• 10Y*: 12.38%

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

XLK vs. XLF - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
XLK State Street Technology Select Sector SPDR ETF	36.47%	24.61%	21.63%	56.02%	-27.73%	34.74%	43.62%	49.86%	-1.68%	34.26%
XLF State Street Financial Select Sector SPDR ETF	-6.64%	14.90%	30.56%	12.03%	-10.59%	34.80%	-1.74%	31.88%	-13.06%	22.00%

Correlation

The correlation between XLK and XLF is 0.34, which is low. Their price movements are largely independent, making them effective diversification partners.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.34
Correlation (3Y) Calculated over the trailing 3-year period	0.38
Correlation (5Y) Calculated over the trailing 5-year period	0.52
Correlation (10Y) Calculated over the trailing 10-year period	0.51
Correlation (All Time) Calculated using the full available price history since Dec 23, 1998	0.59

Over the past year, the correlation between XLK and XLF has dropped to 0.34 - well below their long-term average of 0.59, suggesting their price drivers have been diverging.

XLK vs. XLF - Sectors Allocation Comparison

Sectors	XLK	XLF
Technology	99.7%	1.8%
Energy	0.2%	-
Industrials	0.1%	0.2%
Basic Materials	-	-
Communication Services	-	-
Consumer Cyclical	-	-
Consumer Defensive	-	-
Financial Services	-	98.0%
Healthcare	-	-
Real Estate	-	-
Utilities	-	-

Return for Risk

XLK vs. XLF — Risk / Return Rank

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

XLK

XLK Risk / Return Rank: 83
XLK Sharpe Ratio Rank: 91
XLK Sortino Ratio Rank: 85
XLK Omega Ratio Rank: 83
XLK Calmar Ratio Rank: 80
XLK Martin Ratio Rank: 73

XLF

XLF Risk / Return Rank: 9
XLF Sharpe Ratio Rank: 9
XLF Sortino Ratio Rank: 9
XLF Omega Ratio Rank: 9
XLF Calmar Ratio Rank: 9
XLF Martin Ratio Rank: 9

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. XLF - Risk-Adjusted Trends Comparison

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

	XLK	XLF	Difference
Sharpe ratio: Return per unit of total volatility	3.24	0.08	+3.16
Sortino ratio: Return per unit of downside risk	3.92	0.20	+3.72
Omega ratio: Gain probability vs. loss probability	1.52	1.02	+0.49
Calmar ratio: Return relative to maximum drawdown	4.22	0.08	+4.15
Martin ratio: Return relative to average drawdown	14.16	0.20	+13.96
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

XLK vs. XLF - Sharpe Ratio Comparison

The current XLK Sharpe Ratio is 3.24, which is higher than the XLF Sharpe Ratio of 0.08. The chart below compares the historical Sharpe Ratios of XLK and XLF, 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

	XLK	XLF	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	3.24	0.08	+3.16
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	0.96	0.41	+0.55
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	1.06	0.56	+0.50
Sharpe Ratio (All Time) Calculated using the full available price history	0.42	0.20	+0.21

Drawdowns

XLK vs. XLF - Drawdown Comparison

The maximum XLK drawdown since its inception was -82.05%, roughly equal to the maximum XLF drawdown of -82.69%. Use the drawdown chart below to compare losses from any high point for XLK and XLF.

Drawdown Indicators

	XLK	XLF	Difference
Max Drawdown Largest peak-to-trough decline	-82.05%	-82.69%	+0.64%
Max Drawdown (1Y) Largest decline over 1 year	-15.92%	-14.79%	-1.13%
Max Drawdown (3Y) Largest decline over 3 years	-25.66%	-15.54%	-10.12%
Max Drawdown (5Y) Largest decline over 5 years	-33.56%	-25.81%	-7.75%
Max Drawdown (10Y) Largest decline over 10 years	-33.56%	-42.86%	+9.30%
Current Drawdown Current decline from peak	-1.00%	-9.34%	+8.34%
Average Drawdown Average peak-to-trough decline	-34.96%	-20.03%	-14.93%
Ulcer Index Depth and duration of drawdowns from previous peaks	4.74%	5.66%	-0.92%

Volatility

XLK vs. XLF - Volatility Comparison

State Street Technology Select Sector SPDR ETF (XLK) has a higher volatility of 6.98% compared to State Street Financial Select Sector SPDR ETF (XLF) at 3.29%. This indicates that XLK's price experiences larger fluctuations and is considered to be riskier than XLF based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	XLK	XLF	Difference
Volatility (1M) Calculated over the trailing 1-month period	6.98%	3.29%	+3.69%
Volatility (6M) Calculated over the trailing 6-month period	16.68%	10.94%	+5.74%
Volatility (1Y) Calculated over the trailing 1-year period	20.82%	14.41%	+6.41%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	24.90%	18.63%	+6.27%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	24.49%	22.16%	+2.33%

XLK vs. XLF - Expense Ratio Comparison

Both XLK and XLF have an expense ratio of 0.08%, making them cost-effective options compared to the broader market, where average expense ratios typically range from 0.3% to 0.9%.

Dividends

XLK vs. XLF - Dividend Comparison

XLK's dividend yield for the trailing twelve months is around 0.39%, less than XLF's 1.56% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
XLF State Street Financial Select Sector SPDR ETF	1.56%	1.31%	1.42%	1.71%	2.04%	1.63%	2.03%	1.87%	2.08%	1.48%	21.10%	1.95%
XLK State Street Technology Select Sector SPDR ETF	0.39%	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 XLF in my portfolio?

XLK and XLF have a correlation of 0.34, 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 XLF?

XLK has higher volatility (6.98%) compared to XLF (3.29%). In terms of maximum drawdown, XLK dropped -82.05% vs XLF's -82.69%.

Which ETF is better, XLK or XLF?

On 10-year performance, XLK leads with 25.84% vs 12.38% for XLF. Both ETFs have the same 0.08% expense ratio. On volatility, XLF has been the lower-risk option at 3.29%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, XLK or XLF?

Over the 10-year period, XLK has performed better with a 25.84% return vs 12.38%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, XLK or XLF?

XLK and XLF have the same expense ratio: 0.08% per year.

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

XLF has the higher dividend yield at 1.56%, compared with 0.39% for XLK.

What is the main difference between XLK and XLF?

XLK is categorized as Technology Equities, while XLF is Financials Equities. XLK tracks S&P Technology Select Sector Daily Capped 35/20 Index, while XLF tracks Financial Select Sector Index.

Which has better risk-adjusted returns?

XLK currently has the higher Sharpe Ratio (3.24 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.