ETF Comparison

XLC vs XLK: Which Is the Better Pick in 2026?

A head-to-head comparison of State Street Communication Services Select Sector SPDR ETF and State Street Technology Select Sector SPDR ETF covering yield, cost, risk, and income potential.

Updated October 16, 2026

How these figures are calculated: methodology.

Best for

XLCInvestors who want higher current income (1.32% vs 0.48% for XLK).
XLKInvestors who want broad equity exposure.

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Visual comparison

Key metrics

Projected income on $10K

Projections assume the current yield and share price remain constant. Actual results will vary.

Total returns

100% reinvested · ex-date convention. Period returns use this fixed assumption, independent of chart settings. YTD and 1Y are cumulative period returns; 3Y, 5Y, and 10Y are annualized. The shared Since-start window is annualized only when it covers at least one year.

XLC has lagged XLK over the trailing twelve months, posting a -2.17% total return against 29.63%. The lead holds up over 5 years too: XLK has compounded at 19.54% a year, against 7.69% for XLC. XLC has been the steadier holding, though — annualized volatility of 17.1% against 25.1% for XLK. Figures are total returns: price change plus every distribution reinvested.

Total return and risk statistics by fund. Each row is one fund; each column is one period or statistic.
Symbol	YTD cumulative	1Y cumulative	3Y annualized	5Y annualized	Since Jun 2018	Volatility	Sharpe	Sortino	Max drawdown
XLC	-5.43%	-2.17%	18.78%	7.69%	11.06%	17.1%	0.77	1.09	-18.0%
XLK	27.90%	29.63%	29.98%	19.54%	22.84%	25.1%	0.88	1.26	-25.7%

Total return with all distributions reinvested on the ex-dividend date (a modeling convention, not the cash-settlement date), split-adjusted, as of October 16, 2026. YTD and 1Y are cumulative period returns; 3Y, 5Y, and 10Y are annualized. The shared Since-start window is annualized only when it covers at least one year. “Since Jun 2018” measures every fund from June 19, 2018 — the start of shared available history — so all funds share one comparison window. Volatility is the annualized standard deviation of daily total returns over the trailing 3 years. Sharpe and Sortino divide the annualized return in excess of the risk-free rate by, respectively, that volatility and the downside deviation (both over the trailing 3 years) — higher is better. Max drawdown is the largest peak-to-trough total-return decline over the same window — shallower is better.

Side-by-side snapshot

Side-by-side snapshot. Each row is one metric; each column is one fund.
Metric	XLC	XLK
Full name	State Street Communication Services Select Sector SPDR ETF	State Street Technology Select Sector SPDR ETF
Issuer	State Street	State Street
Underlying index	Communication Services Select Sector Index	Technology Select Sector Index
Last Close	$110.32 as of October 16, 2026	$183.47 as of October 16, 2026
Distribution rate	1.32%	0.48%
Trailing 12-month yield	1.25%	0.46%
Distribution Safety Score™	86	96
Safety-Adjusted Yield	1.14%	0.46%
Expense ratio	0.08%	0.08%
AUM	$23.5B	$121B
Distribution frequency	Quarterly	Quarterly
Objective	Provide exposure to the fund's underlying index or strategy per issuer materials.	Track the Technology Select Sector Index, providing exposure to the information technology constituents of the S&P 500.
Asset class	Equity	Equity
Inception date	06/18/2018	12/16/1998
Beta	0.85	1.45
Last dividend	$0.364	$0.221
Ex-dividend date	09/21/2026	09/21/2026

Bottom lineChoose XLC if you want higher current income (1.32% vs 0.48% for XLK). Choose XLK if you want broad equity exposure.

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State Street

ETFs186

Total AUM$2.15T

ETFs and AUM reflect what Dividend Vision tracks — the issuer's full lineup may be larger.

State Street Global Advisors (SSGA) is one of the largest ETF providers globally, known for its flagship SPDR suite of exchange-traded products that serve both institutional and retail investors across a broad range of asset classes. Their 88-fund lineup spans diverse strategies including sector exposure (Select Sector SPDR), income generation (Income and Select Sector SPDR Premium Income families), commodities (including the widely-held GLD gold ETF), bonds, ESG-focused investments, and thematic allocations, with popular tickers like DIA (Diamonds Trust), FEZ (Eurozone exposure), and JNK (high-yield bonds) among their most recognized funds. The issuer is characterized by its comprehensive coverage across multiple market segments and its emphasis on both traditional index-based products and specialized strategies like covered call income funds and factor-based investing.

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Quick verdict

XLC (State Street Communication Services Select Sector SPDR ETF) and XLK (State Street Technology Select Sector SPDR ETF) are both quarterly-pay dividend ETFs, but they take different approaches.

XLC offers the higher yield at 1.32% vs 0.48% for XLK. A higher yield means more current income per dollar invested, though it may come with different risk characteristics.

They have different reference exposures: XLC is linked to Communication Services Select Sector Index while XLK is linked to Technology Select Sector Index, which means their performance drivers differ.

XLK is the larger fund by assets ($121B), but assets alone do not establish trading costs or liquidity.

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Deep dive

Yield & income

On a $10,000 investment, XLC would generate roughly $33.00 cash per distribution, while XLK would produce $12.00 cash per distribution, at current distribution rates. Both pay quarterly distributions.

XLC yield1.32%

XLK yield0.48%

Cash diff on $10K$21.00

Cost & efficiency

Over 10 years on $10,000, XLC would cost approximately $80 in fees vs $80 for XLK (simplified, not compounded). Both charge the same expense ratio.

XLC ER0.08%

XLK ER0.08%

Strategy & risk

XLC tracks Communication Services Select Sector Index with a communication services approach, while XLK tracks Technology Select Sector Index with a technology approach. Beta is 0.85 for XLC and 1.45 for XLK, making XLC the less volatile of the two by this measure.

XLC beta0.85

XLK beta1.45

Fund details

XLC is managed by State Street (launched 06/18/2018) with $23.5B in assets. XLK is managed by State Street (launched 12/16/1998) with $121B in assets.

XLC AUM$23.5B

XLK AUM$121B

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Frequently asked questions

What is the current distribution rate for XLC and XLK?

XLC currently distributes 1.32% and XLK 0.48%, based on fund data updated October 2026. Distribution rate moves with both the payout and the share price, so check the as-of date before relying on either figure.

Is XLC or XLK better for dividend income?

It depends on your goals. XLC currently offers the higher distribution yield, which means more income per dollar invested. However, a lower-yield fund may offer better total return or lower volatility. Consider your time horizon and risk tolerance.

What is the difference between XLC and XLK?

XLC (State Street Communication Services Select Sector SPDR ETF) tracks Communication Services Select Sector Index with a communication services approach, while XLK (State Street Technology Select Sector SPDR ETF) tracks Technology Select Sector Index with a technology approach. They are issued by State Street and State Street respectively.

Can I hold both XLC and XLK?

Yes — nothing prevents holding both. Whether the combination actually diversifies depends on how much the underlying exposures overlap, which isn't fully measurable from the data on this page; review each security's holdings, sector, and strategy before treating them as complementary.

Is XLC or XLK safer?

By Dividend Vision's Distribution Safety Score — a rules-based 0–100 estimate of how resilient a distribution looks, where higher is safer — XLK scores 96, XLC scores 86, so XLK's payout currently looks the more resilient of the two. XLC has also shown lower price volatility (beta 0.85 vs 1.45 for XLK). No score makes an investment risk-free — treat this as a screening signal, not a guarantee.

Which has lower fees, XLC or XLK?

XLC and XLK both charge the same expense ratio of 0.08%, so neither is cheaper on fees — pick based on yield, strategy, or underlying index instead.

How much income does $10,000 in XLC vs XLK generate?

At current rates, $10,000 in XLC would generate roughly $33.00 cash per distribution ($132.00 annually). The same in XLK would produce about $12.00 cash per distribution ($48.00 annually).

Which has performed better historically, XLC or XLK?

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Dividend dates and history

XLC vs XLK — at a glance

Generated October 17, 2026.

Overview

XLC and XLK are State Street sector ETFs that track distinct S&P 500 subsets: Communication Services and Technology, respectively. Both charge 0.08% and pay quarterly distributions, but they differ fundamentally in composition, volatility, income yield, and asset base. XLC captures media, entertainment, and telecom companies; XLK focuses on software, semiconductors, and hardware makers.

How they differ

The biggest difference is volatility and growth orientation. XLK carries a beta of 1.45, meaning it amplifies broad market moves by roughly 45% more than the index; XLC's beta of 0.85 suggests it swings about 15% less than the market. That gap reflects technology's secular momentum and leverage to economic cycles versus communication services' steadier, more defensive character.

Income generation diverges sharply. XLC yields 1.32%, nearly three times XLK's 0.48%, because communication services companies tend to distribute more cash relative to earnings than technology firms reinvesting for growth. XLK's lower payout reflects the sector's preference for retained earnings and buybacks over dividends.

Scale differs too. XLK manages $121B, more than five times XLC's $23.5B, making it one of the most widely held sector ETFs. That size advantage typically means tighter bid-ask spreads and greater liquidity, though both track liquid underlying indexes. XLK also has a much longer track record, having launched in 12/16/1998, versus XLC in 06/18/2018.

Who each is best for

XLC: Fits investors seeking higher current income from equities, with lower volatility tolerance and interest in media, entertainment, and telecom exposure within a diversified portfolio.

XLK: Fits growth-oriented investors comfortable with elevated market sensitivity, seeking exposure to secular technology trends and willing to accept lower near-term yield for capital appreciation potential.

Key risks to know

Sector concentration and cyclicality. XLK's technology weighting makes it sensitive to interest rates, valuation resets, and earnings disappointments in software and semiconductors—moves that can be swift and sizable given the sector's beta of 1.45. XLC's communication services tilt exposes holders to cord-cutting, advertising downturns, and legacy-media headwinds, partially offset by telecom stability.

Valuation sensitivity. Technology stocks, which dominate XLK, have historically traded at elevated price-to-earnings multiples; compressed valuations can drive extended underperformance. Communication services, the primary XLC holding, tends to trade at a discount to the broad market, which may reflect structural challenges in legacy media and advertising.

Overlapping holdings risk. Mega-cap tech companies like Apple, Microsoft, and Alphabet hold positions in both XLC (through advertising/communication services links) and XLK (as core technology holdings), so the two are not purely orthogonal; holdings overlap warrants verification.

Dividend sustainability in XLC. At a distribution rate of 1.32%, the fund relies on actual sector cash flows. Media and entertainment earnings face cyclical and structural pressure; if payouts outpace underlying growth for extended periods, NAV erosion becomes a consideration.

Bottom line

If you prioritize current income and smoother returns, XLC's higher yield and lower beta appeal; if you seek long-term growth and can tolerate swings tied to technology cycles, XLK's greater asset base, lower expenses relative to scale, and secular tailwinds stand out. Both track transparent indexes and charge identical expense ratios. Past performance doesn't predict future results, and sector rotation can reverse these relative trajectories at any time.

AI-generated analysis for educational purposes only. Verify important details independently; past performance does not guarantee future results.

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These comparisons follow the Dividend Vision methodology.