Should You Invest in the Technology Select Sector SPDR ETF (XLK)?
Designed to provide broad exposure to the Technology - Broad segment of the equity market, the Technology Select Sector SPDR ETF (XLK) is a passively managed exchange traded fund launched on 12/16/1998.
XLK Should Rally Hard Into Year-End, But Not Just Yet
Technology stocks led the 2024 rally but have since declined sharply, with XLK's performance suffering in part due to heavy reliance on Microsoft and NVIDIA. Both Microsoft and NVIDIA are in downtrends, contributing to XLK's bearish momentum and poor technical indicators, including falling below key support levels. XLK's seasonality is weak in September, but historically strong in October and November, suggesting a potential year-end rally after further declines.
September Swoon: Is a Big Sell-Off Imminent?
Expecting a big drawdown in September? Not so fast - here's what most investors usually miss.
Stop Overthinking And Buy XLK
XLK, the SPDR Select Sector Technology ETF, offers concentrated exposure to high-margin tech companies, and could potentially outperform other funds like QQQ over the long term. Tech companies have unique advantages due to low unit COGS and high barriers to entry, which powers excellent operating leverage. Despite valuation concerns, XLK's top holdings are trading near their 5-year fair value ranges, making the ETF attractive at 28x FWD P/E.
Will Tech ETFs See Further Selloffs?
U.S. technology stocks are currently under significant pressure, as noted by Citigroup strategists. Here are some tech ETFs to consider.
Watch These XLK Tech Sector ETF Price Levels Amid Recent Volatility
The Technology Select Sector SPDR Fund (XLK) is down 6% this month amid a downturn for technology stocks.
XLK: If You Are Underweight Tech Stocks, This ETF Is For You
XLK ETF down almost 15% from its July high, underperforming the S&P 500 ETF by 6%+. However, the technology sector sell-off was not rational; earnings were strong, and we are still in a long-term secular bull market in Tech, driven by AI and other growth catalysts too. The XLK ETF has a concentrated portfolio, with 41% in just two stocks: Microsoft & Nvidia. The expense fee is a very reasonable and economic 0.09%.
XLK: Pivotal Week Will Shape The 2024 Trajectory, Expect Near-Term Volatility
XLK faces a pivotal week with over a third of IT companies reporting earnings, including Microsoft. Strong double-digit growth and robust earnings in the IT sector are expected to drive XLK's rich outlook; XLK upgraded to Buy. Rebalancing in XLK sees Nvidia replacing Apple as the second-highest weighted position, while overall allocation to semiconductor stocks also increases.
Should You Invest in the Technology Select Sector SPDR ETF (XLK)?
Launched on 12/16/1998, the Technology Select Sector SPDR ETF (XLK) is a passively managed exchange traded fund designed to provide a broad exposure to the Technology - Broad segment of the equity market.
Investing Later in Life? Putting Money in This ETF Can Help You Make the Most of It
If you want to invest a bit more aggressively in the stock market, there's a way to do that without taking on an excessive amount of risk. Tech stocks could deliver outsized gains in the long run as they benefit from the boom in artificial intelligence.
XLK: Low Diversity, Too Concentrated On Nvidia Stock
Nvidia Corporation's increased weighting in The Technology Select Sector SPDR® Fund ETF poses concentration risk, impacting overall performance and vulnerability to market corrections. The XLK ETF's Seeking Alpha quant metrics raise concerns, especially with increased Nvidia weighting & potential downside risk of 45% in Nvidia, leading to a potential 9% downside in the ETF. Given this, I am a sell on the ETF.
XLK Technology SPDR: You Are Now Taking Unnecessary Risks
XLK's recent performance is likely to attract more momentum seeking investors, but there are significant risks involved. Extreme concentration within the ETF is making it less likely that it will continue to outperform more diversified alternatives. The current set-up also does not favour momentum stocks and this is a major red flag for the ETF's future performance.
