XSW ETF: A Complete Guide — Returns, Expense Ratio, Holdings, and Alternative ETFs
The State Street SPDR S&P Software & Services ETF (XSW) is a passive fund that holds U.S. software and IT services companies on an equal-weighted basis. Its equal-weighting structure and the resulting differences in weighting and composition versus related products such as VGT, XLK, and IYW are the key selection criteria.
SubscribeWhat Is the State Street SPDR S&P Software & Services ETF?
It is a passive ETF that holds U.S. software and IT services companies on an equal-weighted basis, regardless of market capitalization. By allocating similar weights to both large-cap and small- and mid-cap companies, it reduces concentration in large-cap names.
It is well suited for investors seeking broad, balanced exposure to the software sector without large-cap concentration, while accepting sector-focused volatility.
It is a passive (index-tracking) ETF managed by State Street.
How to Invest in the State Street SPDR S&P Software & Services ETF
| Item | Details |
|---|---|
| Underlying Index | S&P Software & Services (Equal Weight) |
| Management Style | Passive (Equal Weight) |
| Investment Focus | Software & IT Services Companies |
| Dividend Frequency | Quarterly |
| Total Expense Ratio | 0.35% |
The fund holds U.S. software and IT services companies on an equal-weighted basis regardless of market capitalization, rebalancing regularly to maintain equal weights. This structure reduces the large-cap software concentration typical of market-cap-weighted approaches, providing more balanced exposure that includes small- and mid-cap software companies.
- Equal-weighted exposure to the software sector
- Reduced large-cap software concentration
Size and Cost of the State Street SPDR S&P Software & Services ETF (AUM & Expense Ratio)
Assets under management (AUM) stand at $500.6M, and the total expense ratio is 0.35% annually.
Compared with market-cap-weighted tech ETFs such as VGT and XLK, the main differentiators are software-focused exposure and the equal-weighting approach.
Performance and Flows of the State Street SPDR S&P Software & Services ETF
1-Year Price Performance
Dividend & Yield
52-Week Price RangeSoftware stocks tend to react sensitively to interest rates, earnings seasons, and the tech investment environment. They typically perform well during phases of strong growth expectations and may underperform during rising-rate environments or growth-stock corrections. The equal-weighted structure results in a meaningful allocation to small- and mid-cap software names, which can lead to higher volatility.
Capital flows into and out of software stocks fluctuate with growth-stock preferences, the tech investment environment, and risk appetite. During periods of rising expectations for software growth, funds may rotate into this category of products. Performance can also vary with the interest rate and growth-stock cycle, which warrants attention.
Strengths and Weaknesses of the State Street SPDR S&P Software & Services ETF
Balanced exposure across the software sector is its key strength, while sector concentration, small- and mid-cap volatility, and rate sensitivity are the key considerations.
💪 Core Strengths
⚠️ Key Risks
Alternative ETFs and Related Products for the State Street SPDR S&P Software & Services ETF
For market-cap-weighted exposure to software, direct substitutes such as IGV are available, while those seeking cloud-software focus may also compare products like WCLD. For broader cloud-computing exposure, products such as SKYY are worth considering as well. The three products shown in the table — VGT, XLK, and IYW — all invest across the broader technology sector on a market-cap-weighted basis, so they differ from this ETF in terms of software concentration and weighting methodology. The defining feature of this ETF is its equal-weighted exposure to the software sector.
Peer Comparison ETFs| Ticker | Name | Price | Change | AUM | Total Expense Ratio | Dividend Yield | 1Y |
|---|---|---|---|---|---|---|---|
 VGT | Vanguard Information Technology ETF | $110.52 | -1.3% | $139.5B | 0.09% | 0.43% | +13.3% |
 XLK | State Street Technology Select Sector SPDR ETF | $168.91 | -1.1% | $114.2B | 0.08% | 0.49% | +14.3% |
 SOXX | iShares Semiconductor ETF | $146.48 | -0.2% | $41.5B | 0.33% | 0.28% | +45.5% |
 IYW | iShares Dow Jones U.S. Technology Sector Index Fund | $230.81 | -1.4% | $23.4B | 0.37% | 0.11% | +12.7% |
 FTEC | Fidelity MSCI Information Technology Index ETF | $263.80 | -1.3% | $20.0B | 0.08% | 0.42% | +13.4% |
Top Holdings| Ticker | Name | Weight | Price | Change | Market Cap | P/E | Dividend Yield |
|---|---|---|---|---|---|---|---|
 MYMK | State Street My2031 Municipal Bond ETF | 0.19% | $24.76 | -0.1% | $0.0M | - | 2.6% |
 PRCH | Porch Group Inc | 0.01% | $21.95 | +6.3% | $2.5B | 335.1 | - |
 AIP | Arteris Inc | 0.01% | $19.09 | -0.6% | $949.4M | - | - |
 TENB | Tenable Holdings Inc | 0.01% | $41.96 | -3.9% | $4.4B | 306.9 | - |
 BRZE | Braze Inc | 0.01% | $46.24 | +0.3% | $5.3B | - | - |
| RBLX | Roblox Corp | 0.01% | $51.19 | -0.8% | $36.6B | - | - |
| PANW | Palo Alto Networks Inc | 0.01% | $326.49 | -1.3% | $267.3B | 637.0 | - |
 NTSK | Netskope Inc | 0.01% | $21.44 | -4.7% | $8.8B | - | - |
 PAR | Par Technology Corp | 0.01% | $22.30 | +2.3% | $922.6M | - | - |
Investor Checklist for the State Street SPDR S&P Software & Services ETF
Key items to review before investing in XSW: balanced industry exposure is appealing, but sector concentration, small- and mid-cap volatility, and rate sensitivity should be evaluated in advance. It is also advisable to compare it against market-cap-weighted technology and software products.
| Checklist Item | What to Verify | Current Status |
|---|---|---|
| ⚖️ Weighting Methodology | Difference between equal-weight and market-cap weighting | Equal-Weighted |
| 🏢 Industry Concentration | Share allocated to the single software industry | Software-Focused |
| ⚡ Volatility | Volatility of small- and mid-cap software names | Somewhat Elevated |
| 💵 Expense Ratio | Expense level relative to sector ETFs | Needs Verification |
Rising rates, growth-stock corrections, and software-industry concentration are the main drivers of short-term performance, and the equal-weighted structure increases the small- and mid-cap software weighting, which can amplify volatility. Given its single-industry focus, drawdowns may be pronounced during broad market sell-offs.
It is a strong candidate for investors seeking balanced exposure to the software sector without large-cap concentration. Those who want market-cap-weighted software exposure may prefer a product such as IGV, while investors seeking equal-weighted software diversification may want to compare and choose between that product and this ETF.
SubscribeDisclaimer: This content is for informational purposes only and does not constitute investment advice. All investment responsibility lies with the investor.
This article reflects information as of June 10, 2026.
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