IVV vs XLK: Which ETF Is Better in 2026?
A metric-by-metric comparison of iShares Core S&P 500 ETF (IVV) and State Street Technology Select Sector SPDR ETF (XLK) — both US Large Cap Blend / Technology funds — using ETFValuer's daily-updated rankings.
Educational content — not financial advice. Data as of July 25, 2026. ~5 minute read.
The Verdict
IVV (US Large Cap Blend) and XLK (Technology) sit in different corners of the market, so this is less a head-to-head than a question of what role each would play. They can be complements rather than alternatives — the metrics below show how differently the two have actually behaved.
On ETFValuer's overall model — which blends return, risk-adjusted performance, cost, drawdown, size and volatility — XLK scores higher: 77.7 (Grade B+) versus 75.6 for IVV. That doesn't make IVV a bad fund; it means XLK currently edges it out on this specific mix of factors. Read the metric-by-metric breakdown below before deciding which matters more for your own portfolio.
Head-to-Head: Every Metric
| IVV | XLK | |
|---|---|---|
| Category | US Large Cap Blend | Technology |
| Expense ratio | 0.03% | 0.08% |
| Fund size (AUM) | $888.1B | $123.9B |
| Dividend yield | 0.77% | 0.62% |
| 1-year return | +17.87% | +35.85% |
| 3-year return | +67.95% | +101.18% |
| Volatility | 12.69% | 24.77% |
| Max drawdown | -18.75% | -25.66% |
| Sharpe ratio | 1.01 | 1.25 |
| ETFValuer score | 75.6 | 77.7 |
| Grade | B+ | B+ |
| Overall rank | #47 | #27 |
Bold marks the better value in each row. "Better" is directional only (e.g. lower cost, higher return) — it isn't a recommendation by itself. See the full methodology.
Cost
IVV is the cheaper fund, charging 0.03% a year versus 0.08% for XLK — a gap of 0.05 percentage points (about $5.00/year on a $10,000 position) that compounds meaningfully over a multi-decade holding period. Because these funds do different jobs, though, cost alone shouldn't decide it — a cheaper fund that gives you the wrong exposure is a false economy. See the ETF Fee Calculator for the exact dollar impact at your investment size and horizon.
What XLK's Fees Cost You
XLK charges an expense ratio of 0.08% a year, deducted automatically from the fund's value. Small percentages compound into real money — adjust the figures below to see the impact on your own numbers.
Assumes a constant gross return and no additional contributions — a simplification, but it isolates exactly what the expense ratio costs. Try the full fee calculator to model contributions and compare any two funds.
Performance & Risk
Over the trailing 3 years, XLK returned +101.18% versus +67.95% for IVV — a gap of about 33.2 percentage points. On risk, IVV has held up better historically, with a shallower max drawdown (-18.75% vs. -25.66%). XLK currently has the better risk-adjusted return (Sharpe ratio of 1.25 vs. 1.01), meaning it delivered more return per unit of volatility taken on.
How Closely Do They Track Each Other?
Over the last 3.0 years of daily returns (752 shared trading days), IVV and XLK show a strong correlation of 0.898 — clearly related, with room to diverge. There is some genuine differentiation here, but not enough to call these complementary holdings. Pairing them mostly concentrates risk rather than spreading it.
| Measure | Value | What it means |
|---|---|---|
| Daily return correlation | 0.898 | Strong — clearly related, with room to diverge |
| R-squared | 80.6% | 80.6% of IVV's daily moves are explained by XLK's |
| Tracking error (annualised) | 13.01% | Typical yearly spread between the two funds' returns |
| Annualised return over 3.0y | IVV +19.16% · XLK +26.41% | XLK ahead by 7.24 points a year |
Correlation alone understates how far these can drift. Across every rolling 12-month window in the period, IVV finished as much as +12.5 points ahead of XLK at the best extreme and -42.2 points at the worst — a 54.7-point spread between the best and worst year of relative performance. Two funds can correlate tightly day to day and still deliver very different outcomes over any single year you happen to hold them.
Calculated from daily total returns over the trailing 3-year window, recomputed every day this site refreshes. Correlation of 1.00 means the two funds moved in lockstep; 0.00 means their daily moves were unrelated.
Holdings Overlap
IVV and XLK hold 4 of the same companies among their top 10 positions. Those shared names make up 24.0% of IVV and 44.5% of XLK. That's meaningful duplication. The funds aren't interchangeable, but a good share of your money would be riding on the same companies twice.
| Shared Holding | IVV Weight | XLK Weight |
|---|---|---|
| NVIDIA Corp. | 7.97% | 15.50% |
| Apple, Inc. | 6.61% | 13.63% |
| Microsoft Corp. | 6.74% | 10.05% |
| Broadcom, Inc. | 2.72% | 5.37% |
Compares the top 10 reported holdings from each fund's most recent SEC N-PORT-P filing, so it understates total overlap — funds tracking similar indexes overlap far more deeply than the top 10 alone can show. Search any company across all tracked funds with the Stock Overlap tool.
Which One Should You Pick?
Lean IVV if…
- You want the lower running cost — 0.03% vs 0.08%, about $5 a year less on a $10,000 position
- Current income matters to you — it yields 0.77% against 0.62%
- It has been the calmer ride (12.7% volatility vs 24.8%) with a shallower worst-case fall (-18.8% vs -25.7%)
- You want the deeper, more liquid market ($888B in assets vs $124B)
Lean XLK if…
- You care about return per unit of risk — its Sharpe ratio of 1.25 beats 1.01
- You weight recent results heavily — it returned 101.2% over 3 years against 68.0%
These two are not really substitutes, so "both, in some proportion" is often the right answer rather than picking one. Model the blend with the Portfolio Blender.
Frequently Asked Questions
Is IVV or XLK better?
On ETFValuer's overall model — which blends return, risk-adjusted performance, cost, drawdown, size and volatility — XLK scores higher: 77.7 (Grade B+) versus 75.6 for IVV. That doesn't make IVV a bad fund; it means XLK currently edges it out on this specific mix of factors. Read the metric-by-metric breakdown below before deciding which matters more for your own portfolio.
Which has the lower expense ratio, IVV or XLK?
IVV currently has the lower expense ratio (0.03% vs. 0.08%).
Can I hold both IVV and XLK?
You can, though the benefit is limited. At a correlation of 0.90, IVV and XLK fall together far more often than not, so owning both adds complexity and a second expense ratio without much real diversification. Most investors are better served picking one.
Go deeper on either fund
Full daily-updated metrics, holdings context, and category peers.