FTEC tracks the MSCI USA IMI Information Technology index, which covers a broader range of technology companies than the S&P 500-only alternatives, including small and mid-cap tech firms alongside the large-cap names. The expense ratio of 0.084% is lower than XLK's 0.08% — both are exceptionally cheap — and the fund provides comparable exposure to the dominant technology sector holdings. Apple, Microsoft, NVIDIA and Broadcom are the largest positions, similar to XLK, with the MSCI-based index adding more small and mid-cap technology exposure below the S&P 500 cutoff. This broader reach gives FTEC slightly more diversification than the pure S&P 500 technology sector approach. At $15B in assets, it is smaller than XLK and therefore has slightly less liquidity, which matters more for institutional traders than individual investors. For investors comparing FTEC to XLK, the practical performance difference is minimal over time — both are dominated by the same mega-cap technology companies. FTEC is a sensible choice for Fidelity account holders who want seamless integration and appreciate the marginally broader market coverage below the large-cap tier.
