The Technology Select Sector SPDR Fund, better known by its ticker XLK, just had the kind of month that makes portfolio managers quietly update their LinkedIn profiles. The fund posted roughly $9 billion in outflows, making it the worst-performing sector ETF by that measure, while simultaneously dropping 5.4% in value.
For a fund that tracks the largest technology companies in the S&P 500 and manages assets estimated between $100 billion and $117 billion, that’s not exactly a rounding error.
What happened to the tech trade
XLK has long been the default vehicle for investors who want broad exposure to big tech without picking individual stocks. It charges just 0.08% in annual fees, which is roughly the cost of a fancy coffee per $1,000 invested.
The 5.4% monthly decline placed XLK at the bottom of the sector rankings. Five out of eleven sectors showed outflows during the same period, but none came close to matching tech’s hemorrhaging.
