State Street has had a tremendous advantage in the exchange-traded fund world by being the first issuer of dedicated sector funds. Their highly successful SPDR sector series debuted in 1998 and has spent nearly two decades building a world-class reputation. Everyone from professional to novice investors respect SPDR ETFs for their liquidity, transparency, low-costs, and tax efficiency.

The original suite of 9 sector funds is built on the Standard & Poor's Global Industry Classification Standard. This is published by a panel of experts to clearly delineate each company within the S&P 500 Index into individual categories based on their business practices. The end result is a diversified pool of large-cap stocks within each group that offer a range of competing products and services.

This article will be the first in a series dedicated to peeling back the onion that is each major SPDR sector ETF. The goal of this process is to understand how each of these funds is constructed and the nuances in their field. In addition, I will be comparing these benchmarks against other competing ETFs to see how they stack up in terms of index construction, performance, fees, and other key metrics.

Technology Select Sector SPDR (XLK)

There are many titans within the technology world. Apple Inc (AAPL) owns smart phones, Alphabet Inc (GOOGL) owns search, and Facebook Inc (FB) owns social media. Bringing all of these juggernauts and more together in one package is the well-known Technology Select Sector SPDR (XLK). This ETF has been a dominant force in the technology world during its entire 17-year existence and continues that tradition today as the largest ETF in its category.

XLK is made up of 75 large-cap companies engaged in the production of software, hardware, social media, internet services, telecommunication, and other electronic devices. In addition to the three household names mentioned above, it contains significant exposure to Microsoft Corp (MSFT) and AT&T Inc (T) in its top five holdings.