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.

Data updated September 4, 2026

Best for

XLCInvestors who want higher current income (1.01% vs 0.49% 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

XLC has lagged XLK over the trailing twelve months, posting a 0.34% total return against 44.07%. The lead holds up over 5 years too: XLK has compounded at 19.52% a year, against 6.65% for XLC. XLC has been the steadier holding, though — annualized volatility of 16.9% against 25.0% 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	1Y	3Y	5Y	Since Jun 2018	Volatility	Sharpe	Sortino	Max drawdown
XLC	-3.60%	0.34%	20.00%	6.65%	11.39%	16.9%	0.82	1.16	-18.0%
XLK	30.10%	44.07%	29.30%	19.52%	23.48%	25.0%	0.85	1.21	-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 September 4, 2026. YTD and 1Y are cumulative; windows of one year or longer are annualized. “Since Jun 2018” measures every fund from June 19, 2018 — the youngest fund's first trading day — 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	$112.03 as of September 4, 2026	$187.28 as of September 4, 2026
Distribution yield	1.01%	0.49%
Distribution Safety Score™	86	99
Safety-Adjusted Yield	0.87%	0.49%
Expense ratio	0.08%	0.08%
AUM	$22.4B	$120B
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	0.84	1.47
Last dividend	$0.284	$0.228
Ex-dividend date	06/22/2026	06/22/2026

Bottom lineChoose XLC if you want higher current income (1.01% vs 0.49% for XLK). Choose XLK if you want broad equity exposure.

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State Street

ETFs179

Total AUM$2124B

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 1.01% vs 0.49% 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 ($120B), which generally means tighter spreads and better liquidity.

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Deep dive

Yield & income

On a $10,000 investment, XLC would generate roughly $8.42/month, while XLK would produce $4.08/month, at current distribution rates. Both pay quarterly distributions.

XLC yield1.01%

XLK yield0.49%

Monthly diff on $10K$4.33

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 0.84 for XLC and 1.47 for XLK, making XLC the less volatile of the two by this measure.

XLC beta0.84

XLK beta1.47

Fund details

XLC is managed by State Street (launched 06/18/2018) with $22.4B in assets. XLK is managed by State Street (launched 12/16/1998) with $120B in assets.

XLC AUM$22.4B

XLK AUM$120B

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Frequently asked questions

What is the current distribution yield for XLC and XLK?

XLC currently distributes 1.01% and XLK 0.49%, based on fund data updated September 2026. Distribution yield 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 99, XLC scores 86, so XLK's payout currently looks the more resilient of the two. XLC has also shown lower price volatility (beta 0.84 vs 1.47 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 $8.42 per month ($101.00 annually). The same in XLK would produce about $4.08 per month ($49.00 annually).

Which has performed better historically, XLC or XLK?

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XLC vs XLK — at a glance

Generated August 29, 2026.

Overview

XLC and XLK are both State Street sector ETFs tracking S&P 500 subsets, but they represent fundamentally different parts of the market. XLC covers Communication Services (media, entertainment, telecom) while XLK tracks Technology (software, semiconductors, IT services). The two sectors behave very differently: XLC is less volatile and yields higher; XLK is more growth-oriented, higher beta, and larger.

How they differ

The biggest difference is volatility and growth character. XLK has a beta of 1.47 versus XLC's 0.84, meaning XLK amplifies market moves significantly while XLC dampens them. XLC yields 1.01% against XLK's 0.49%, reflecting Communication Services' more mature, income-tilted composition versus Technology's reinvestment-focused profile. XLK commands much larger assets at $120B versus XLC's $22.4B, and XLK has a 25-year track record (inception December 1998) compared to XLC's more recent launch in June 2018. Both charge the same 0.08% expense ratio.

Who each is best for

XLC: Fits investors seeking lower portfolio volatility with a defensive yield tilt. The 0.84 beta suits those who want sector participation without magnified swings, and the 1.01% distribution rate appeals to income seekers willing to accept slower long-term capital appreciation.

XLK: Fits growth-oriented investors comfortable with higher volatility and longer time horizons. The 1.47 beta captures upside in market rallies, and the lower 0.49% yield reflects a sector where companies retain earnings for reinvestment and R&D rather than paying dividends.

Key risks to know

Sector concentration. Both ETFs are single-sector bets. Any downturn specific to Communication Services or Technology—regulatory pressure, cyclical weakness, or secular disruption—will hit the entire fund with no diversification cushion.

Technology's valuation sensitivity. XLK's high beta amplifies both gains and losses. In rising-rate environments or growth-scare selloffs, the fund's 1.47 beta means it typically falls harder than the broad market.

Communication Services dividend sustainability. XLC's higher yield (1.01%) comes from mature, slower-growth businesses. Earnings pressure or strategic shifts in media or telecom could pressure dividend coverage, though the sector's oligopolistic structure offers some stability.

XLC's shorter history. XLC launched in June 2018, so it has only weathered one major downturn cycle. XLK's 25-year record provides more evidence of behavior across market regimes.

Bottom line

If you prioritize stability and current income, XLC's lower volatility and higher yield align with a defensive posture; if you're building for long-term growth and can tolerate swings, XLK's larger scale and higher beta suit a longer time horizon. The two sectors move differently, so their performance patterns merit separate evaluation within your broader allocation. Past performance does not guarantee future results.

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

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