What Do Investors Need to Know About XLK and FTEC?

XLK and FTEC are highly similar ETFs that both focus on the technology sector. Both ETFs rely on big tech stalwarts like Nvidia, Microsoft, and Apple. Due to this, they boast nearly identical performance and risk metrics. What’s more, they both have an expense ratio of 0.08%, meaning that there is no difference between the two when it comes to costs. However, there are a few key differences that are worth exploring.

For example, FTEC offers a wider portfolio breadth, with nearly 300 holdings. That’s more than 4x as many as XLK, which has only 70 stock holdings. Granted, many of those 300 holdings in FTEC are very small on a percentage basis, but those additional positions due provide some diversification.

Next, investors may want to consider the differences in AUM. XLK has a much higher AUM of $95.6 billion, as compared to $16.6 billion for FTEC. While both figures are more than sufficient for proper liquidity, XLK’s superior figure gives it a slight edge for investors concerned with this metric.

In summary, XLK and FTEC are very similar ETFs, offering identical, or nearly identical, performance histories, expense ratios, and dividend yields. What sets them apart are AUM and the number of holdings. However, for tech-oriented investors, either fund provides a solid way to benefit from the growth of the tech industry over the long term.

ETF (Exchange-Traded Fund): An investment fund traded on stock exchanges, holding a basket of assets like stocks or bonds.Expense ratio: The annual fee, as a percentage of assets, that a fund charges to cover operating costs.Dividend yield: Annual dividends paid by a fund or stock, expressed as a percentage of its current price.Liquidity: How easily an asset can be bought or sold in the market without affecting its price.AUM (Assets Under Management): The total market value of assets that a fund manages on behalf of investors.Beta: A measure of an investment’s volatility compared to the overall market, typically the S&P 500.Max drawdown: The largest percentage drop from a fund’s peak value to its lowest point over a specific period.Sector exposure: The proportion of a fund’s assets invested in a particular industry or sector.Portfolio breadth: The number of different holdings within a fund, indicating how diversified it is.Concentration of holdings: The extent to which a fund’s assets are invested in its largest positions.Total return: The investment’s price change plus all dividends and distributions, assuming those payouts are reinvested.Trailing one-year return: The total return of an investment over the past 12 months.

For more guidance on ETF investing, check out the full guide at this link.

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Jake Lerch has positions in Nvidia. The Motley Fool has positions in and recommends Apple, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

Tech ETFs: What Do Investors Need to Know About XLK and FTEC? was originally published by The Motley Fool