2024-05-20 11:52:31 ET
Summary
- The technology sector has been one of the best performers with strong earnings growth and a high ratio of earnings beats.
- The Technology Sector Select SPDR has a low expense ratio compared to competing products, resulting in potential long-term savings.
- The concentration of the ETF in a few top holdings and the high valuation of the tech sector are potential concerns for investors.
Introduction
The Technology Select Sector SPDR Fund ETF ( XLK ) is a low-cost ETF focused on tracking large cap technology names within the S&P 500. I am a long-term bull on technology as an investment case, as technology is a fundamental driving force behind economic growth. Its impact cannot be understated, an OECD paper described technology's impact as the following:
" It is taken as axiomatic that innovative activity has been the single, most important component of long-term economic growth " (OECD)
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For further details see:
XLK: Sitting On The Sidelines For Now On Mixed Outlook