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 Technology Select Sector SPDR Fund covering yield, cost, risk, and income potential.

Data updated August 13, 2026

Best for

XLCInvestors who want higher current income (1.03% vs 0.48% for XLK).
XLKInvestors who want broad equity exposure.

Jump to the side-by-side numbers

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	Technology Select Sector SPDR Fund
Issuer	State Street	State Street
Last Close	$110.27 as of August 13, 2026	$188.86 as of August 13, 2026
Distribution yield	1.03%	0.48%
Distribution Safety Score™	86	99
Expense ratio	0.09%	0.09%
AUM	$21.7B	$123B
Distribution frequency	Quarterly	Quarterly
Underlying index	Communication Services Select Sector Index	Technology Select Sector Index
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	$0.2840	$0.2280
Ex-dividend date	06/22/2026	06/22/2026

Bottom lineChoose XLC if you want higher current income (1.03% vs 0.48% for XLK). Choose XLK if you want broad equity exposure.

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State Street

ETFs180

Total AUM$2127B

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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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 3.22% total return against 43.76%. The lead holds up over 5 years too: XLK has compounded at 20.66% a year, against 6.94% 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	-5.12%	3.22%	19.08%	6.94%	11.27%	16.9%	0.77	1.09	-18.0%
XLK	31.20%	43.76%	31.52%	20.66%	23.81%	25.0%	0.92	1.31	-25.7%

Total return with all distributions reinvested on the ex-dividend date, split-adjusted, as of August 12, 2026. YTD and 1Y are cumulative; longer windows 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.

Quick verdict

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

XLC offers the higher yield at 1.03% vs 0.48% for XLK. A higher yield means more current income per dollar invested, though it may come with different risk characteristics.

They track different benchmarks: XLC is linked to Communication Services Select Sector Index while XLK tracks Technology Select Sector Index, which means their performance drivers differ.

XLK is the larger fund by assets ($123B), 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 $8.58/month, while XLK would produce $4.00/month, at current distribution rates. Both pay quarterly distributions.

XLC yield1.03%

XLK yield0.48%

Monthly diff on $10K$4.58

Cost & efficiency

Over 10 years on $10,000, XLC would cost approximately $90 in fees vs $90 for XLK (simplified, not compounded). Both charge the same expense ratio.

XLC ER0.09%

XLK ER0.09%

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, indicating XLC is less volatile relative to the market.

XLC beta0.84

XLK beta1.47

Fund details

XLC is managed by State Street (launched 06/18/2018) with $21.7B in assets. XLK is managed by State Street (launched 12/16/1998) with $123B in assets.

XLC AUM$21.7B

XLK AUM$123B

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Frequently asked questions

What is the current distribution yield for XLC and XLK?

XLC currently distributes 1.03% and XLK 0.48%, based on fund data updated August 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 (Technology Select Sector SPDR Fund) 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 0.09%, 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 $8.58 per month ($103.00 annually). The same in XLK would produce about $4.00 per month ($48.00 annually).

Which has performed better historically, XLC or XLK?

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XLC vs XLK — at a glance

Generated August 8, 2026.

Overview

XLC and XLK are both large-cap equity ETFs from State Street that track S&P 500 sector indices, but they expose investors to fundamentally different parts of the market. XLC captures Communication Services—a sector anchored by media, entertainment, and telecom companies—while XLK focuses on Technology, the largest S&P 500 sector by weight. The two differ sharply in volatility, yield, and asset base.

How they differ

The biggest difference is sector composition and risk profile. XLK's beta of 1.43 reflects the higher volatility of technology stocks; XLC's beta of 0.85 signals lower volatility than the broad market. XLC yields 1.02% versus XLK's 0.49%, a meaningful gap driven by dividend practices in media and telecom companies versus the lower-payout tech sector. XLK is far larger, with $123B in AUM compared to XLC's $21.7B, giving it tighter bid-ask spreads and deeper liquidity. Both charge the same 0.09% expense ratio and distribute quarterly, but XLK has a 25-year track record (inception December 1998) versus XLC's more recent launch in June 2018.

Who each is best for

XLC: Fits investors seeking lower volatility and current income from established media, telecom, and entertainment companies, with a preference for stable dividend payers over growth.

XLK: Fits investors with higher risk tolerance who prioritize exposure to the dominant sector of the S&P 500—software, semiconductors, and digital platforms—and accept lower current yield in exchange for potential capital appreciation.

Key risks to know

Sector concentration: Both track single S&P 500 sectors, making them vulnerable to sector-wide downturns. A rotation away from tech or telecom/media could drive significant drawdowns.

Beta divergence: XLK's 1.43 beta means it amplifies broad market moves; XLC's 0.85 dampens them. In a sharp market decline, XLK would fall further; in a rally, it would rise faster. This matters for portfolio construction and timing risk.

Technology-dependent cash flows: XLK's ultra-low yield (0.49%) reflects the sector's preference for reinvesting earnings or buying back shares rather than paying dividends. If tech profitability or capital deployment deteriorates, distributions may contract further.

Secular sector shifts: Communication Services faces headwinds from cord-cutting and advertising cyclicality; technology faces regulatory and valuation pressure. Neither is immune to multi-year headwinds in their underlying holdings.

Bottom line

If you want lower volatility and higher current income from established dividend payers, XLC's lower beta and 1.02% yield align with that profile; if you prioritize exposure to the broader market's dominant growth engine despite higher volatility, XLK's $123B scale and tech sector weight offer that exposure. Past performance doesn't predict future results.

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

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