Big tech (XLK) vs S&P 500 over 10 years?
This page compares 10 years of steady monthly investing into a US technology-sector ETF (XLK) and an S&P 500 ETF (SPY), using the comparison calculator. It places the source of the tech sector's excess return alongside its concentration risk.
Investment conditions
Asset · US Technology Sector ETF (XLK) vs S&P 500 ETF (SPY)
Method · Comparison
The key is that the tech sector's excess return may reflect a concentration effect of a specific phase rather than a 'better choice.' The tech sector can lead the index when Big Tech is strong, but concentration in a few industries and names grows, and drawdowns in declines can deepen accordingly. The S&P 500, spread across industries, is comparatively gentler—but with its already large tech weight, it is not entirely unrelated. In the comparison calculator, review each product's ending balance together with its maximum drawdown and recovery period. It matters to see what risk lay behind the excess return.
Open in comparison calculatorWhy this period and asset
XLK holds only the S&P 500's information-technology sector, giving it a very high Big Tech weight, while SPY holds all 500 companies with broad industry diversification. Over the past 10 years, Big Tech led the market in many stretches around AI, cloud, and semiconductors, so the tech sector often outpaced the index. But a crucial fact here is that the S&P 500 itself has already grown quite heavy in large tech stocks. That is, even a broad index has recently been strongly influenced by Big Tech, and the performance gap between the two products can be seen as a difference in 'how much more concentrated in tech' one is.
Caveats & limits
This comparison reflects one specific past period, and which one leads can change with the start or end date. The tech sector, concentrated in a few industries, can have higher volatility and drawdowns than a broad index, and past performance does not guarantee the future. In real investing, fees, taxes, and exchange rates (for dollar-denominated assets) affect outcomes. This page recommends no purchase; it is educational material comparing character.
Data sources & limits
- Trading fees and taxes are not reflected — figures are pre-tax.
- Based on historical data; does not guarantee future returns.
Frequently asked questions
Which is better, the tech sector or the S&P 500?
Neither is always better. The tech sector led when Big Tech was strong, but it also carries greater concentration risk and drawdowns. Use the comparison calculator to view return and drawdown side by side.
What does it mean that the S&P 500 already has a big tech weight?
The S&P 500's structure gives larger companies bigger weights, so as large tech stocks grew, their share of the index grew substantially. That is why even a broad index has recently been strongly affected by Big Tech's moves.
What should I use as the basis for comparison?
Don't look only at the final return; also review maximum drawdown, time underwater, and recovery period. It matters to confirm that behind the tech sector's excess return lay the risk of concentration in a few industries.
Related scenarios
📋 Results are based on historical data; past returns do not guarantee future returns.
📋 This service is provided for educational purposes to help you understand investing, not as investment advice.
⚠️ Volatility and risk levels differ by asset, so returns alone cannot determine which is better.