XLK - FTEC Vs. XLK: One Of Them Carries Excess Baggage
2024-03-14 23:36:40 ET
Summary
- Fidelity MSCI Information Technology Index ETF is a sizable ETF that offers exposure to the technology sector, but its performance does not compare favorably to larger peers like the XLK.
- FTEC is well-diversified and has a lower expense ratio compared to the XLK, but it has underperformed on mid-to-long-term horizons.
- The valuation of FTEC is higher than the XLK, and potential risks such as higher interest rates could impact its performance. Overall, FTEC is not a compelling investment compared to the XLK.
Investment Thesis
Generally, when investors think about investing in ETF themes related to the technology sector or the communication services sector, larger, well-known ETFs such as the Technology Select Sector SPDR ( XLK ) or the Vanguard Information Technology ETF ( VGT ) are some of the first choices that come to mind....
FTEC Vs. XLK: One Of Them Carries Excess Baggage