Should You Invest in the State Street SPDR S&P Software & Services ETF (XSW)?

Looking for broad exposure to the Technology - Software segment of the equity market? You should consider the State Street SPDR S&P Software & Services ETF (XSW), a passively managed exchange traded fund launched on September 28, 2011.Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.Sector ETFs are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Technology - Software is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 1, placing it in top 6%.Index DetailsThe fund is sponsored by State Street Investment Management. It has amassed assets over $444.42 million, making it one of the average sized ETFs attempting to match the performance of the Technology - Software segment of the equity market. XSW seeks to match the performance of the S&P Software & Services Select Industry Index before fees and expenses.The S&P Software & Services Select Industry Index represents the software sub-industry portion of the S&P Total Stock Market Index. The S&P TMI tracks all the U.S. common stocks listed on the NYSE, AMEX, NASDAQ National Market and NASDAQ Global Select Market. The Software Index is a modified equal weight index.CostsInvestors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.Annual operating expenses for this ETF are 0.35%, making it one of the least expensive products in the space.It has a 12-month trailing dividend yield of 0.06%.Sector Exposure and Top HoldingsWhile ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.This ETF has heaviest allocation in the Information Technology sector -- about 97.1% of the portfolio.Looking at individual holdings, D Wave Quantum Inc (QBTS) accounts for about 1.52% of total assets, followed by Cleanspark Inc (CLSK) and Cipher Mining Inc (CIFR).The top 10 holdings account for about 11.36% of total assets under management.Performance and RiskThe ETF has added roughly 1.51% so far this year and is down about 4.03% in the last one year (as of 12/08/2025). In that past 52-week period, it has traded between $141.65 and $205.24.The ETF has a beta of 1.15 and standard deviation of 24.89% for the trailing three-year period, making it a high risk choice in the space. With about 142 holdings, it effectively diversifies company-specific risk.AlternativesState Street SPDR S&P Software & Services ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, XSW is an outstanding option for investors seeking exposure to the Technology ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.Invesco AI and Next Gen Software ETF (IGPT) tracks STOXX WORLD AC NEXGEN SOFTWARE DEV ID and the iShares Expanded Tech-Software Sector ETF (IGV) tracks S&P North American Technology-Software Index. Invesco AI and Next Gen Software ETF has $640.59 million in assets, iShares Expanded Tech-Software Sector ETF has $8.53 billion. IGPT has an expense ratio of 0.56%, and IGV charges 0.39%.Bottom LineTo learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.Boost Your Portfolio with Our Top ETF InsightsZacks' exclusive Fund Newsletter delivers actionable information, top news and analysis, as well as top-performing ETFs, straight to your inbox every week.Don’t miss out on this valuable resource. It’s free!Get it now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report State Street SPDR S&P Software & Services ETF (XSW): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks