As of Dec. 24, XLK sported a FY 1 P/E ratio of 15.88, up from 15 earlier this month, according to State Street data.
In a sign of just how pricey it is to play defense, the Consumer Staples Select Sector SPDR (NYSEArca: XLP) has a P/E of nearly 18.4. At 15.88, XLK is barely more expensive than the Utilities Select Sector SPDR (NYSEArca: XLU).
Rising valuations on XLK and its holdings may be justifiable if interest rates continue to rise. Earlier Thursday, 10-year Treasury yields topped 3%. A host of sectors could be adversely affected by further upside for Treasury yields, but along with industrials and discretionary, tech is one of the best-performing sectors in rising rate environments.
Technology Select Sector SPDR
ETF Trends editorial team contributed to this post. Tom Lydon’s clients own shares of Google and MSFT.