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DIA vs. XLE: What’s The Difference?

The SPDR Dow Jones Industrial Average ETF Trust (DIA) and the Energy Select Sector SPDR Fund (XLE) are both among the Top 100 ETFs. DIA is a SPDR State Street Global Advisors Large Value fund and XLE is a SPDR State Street Global Advisors Equity Energy fund. So, what’s the difference between DIA and XLE? And which fund is better?

The expense ratio of DIA is 0.04 percentage points higher than XLE’s (0.16% vs. 0.12%). DIA also has a higher exposure to the financial services sector and a lower standard deviation. Overall, DIA has provided higher returns than XLE over the past 11 years.

In this article, we’ll compare DIA vs. XLE. We’ll look at holdings and risk metrics, as well as at their portfolio growth and fund composition. Moreover, I’ll also discuss DIA’s and XLE’s annual returns, performance, and industry exposure and examine how these affect their overall returns.

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Summary

DIAXLE
NameSPDR Dow Jones Industrial Average ETF TrustEnergy Select Sector SPDR Fund
CategoryLarge ValueEquity Energy
IssuerSPDR State Street Global AdvisorsSPDR State Street Global Advisors
AUM30.46B25.55B
Avg. Return13.35%1.28%
Div. Yield1.61%3.92%
Expense Ratio0.16%0.12%

The SPDR Dow Jones Industrial Average ETF Trust (DIA) is a Large Value fund that is issued by SPDR State Street Global Advisors. It currently has 30.46B total assets under management and has yielded an average annual return of 13.35% over the past 10 years. The fund has a dividend yield of 1.61% with an expense ratio of 0.16%.

The Energy Select Sector SPDR Fund (XLE) is a Equity Energy fund that is issued by SPDR State Street Global Advisors. It currently has 25.55B total assets under management and has yielded an average annual return of 1.28% over the past 10 years. The fund has a dividend yield of 3.92% with an expense ratio of 0.12%.

DIA’s dividend yield is 2.31% lower than that of XLE (1.61% vs. 3.92%). Also, DIA yielded on average 12.07% more per year over the past decade (13.35% vs. 1.28%). The expense ratio of DIA is 0.04 percentage points higher than XLE’s (0.16% vs. 0.12%).

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Fund Composition

Industry Exposure

DIA vs. XLE - Industry Exposure

DIAXLE
Technology17.32%0.0%
Industrials16.7%0.0%
Energy2.0%100.0%
Communication Services4.42%0.0%
Utilities0.0%0.0%
Healthcare17.92%0.0%
Consumer Defensive6.3%0.0%
Real Estate0.0%0.0%
Financial Services20.68%0.0%
Consumer Cyclical13.44%0.0%
Basic Materials1.21%0.0%

The SPDR Dow Jones Industrial Average ETF Trust (DIA) has the most exposure to the Financial Services sector at 20.68%. This is followed by Healthcare and Technology at 17.92% and 17.32% respectively. Utilities (0.0%), Basic Materials (1.21%), and Energy (2.0%) only make up 3.21% of the fund’s total assets.

DIA’s mid-section with moderate exposure is comprised of Communication Services, Consumer Defensive, Consumer Cyclical, Industrials, and Technology stocks at 4.42%, 6.3%, 13.44%, 16.7%, and 17.32%.

The Energy Select Sector SPDR Fund (XLE) has the most exposure to the Energy sector at 100.0%. This is followed by Technology and Industrials at 0.0% and 0.0% respectively. Consumer Cyclical (0.0%), Financial Services (0.0%), and Real Estate (0.0%) only make up 0.00% of the fund’s total assets.

XLE’s mid-section with moderate exposure is comprised of Consumer Defensive, Healthcare, Utilities, Communication Services, and Industrials stocks at 0.0%, 0.0%, 0.0%, 0.0%, and 0.0%.

DIA is 20.68% more exposed to the Financial Services sector than XLE (20.68% vs 0.0%). DIA’s exposure to Healthcare and Technology stocks is 17.92% higher and 17.32% higher respectively (17.92% vs. 0.0% and 17.32% vs. 0.0%). In total, Utilities, Basic Materials, and Energy also make up 96.79% less of the fund’s holdings compared to XLE (3.21% vs. 100.00%).

Holdings

DIA - Holdings

DIA HoldingsWeight
UnitedHealth Group Inc7.63%
Goldman Sachs Group Inc7.23%
The Home Depot Inc6.07%
Microsoft Corp5.16%
Salesforce.com Inc4.65%
Amgen Inc4.64%
Boeing Co4.56%
Visa Inc Class A4.45%
McDonald’s Corp4.4%
Honeywell International Inc4.18%

DIA’s Top Holdings are UnitedHealth Group Inc, Goldman Sachs Group Inc, The Home Depot Inc, Microsoft Corp, and Salesforce.com Inc at 7.63%, 7.23%, 6.07%, 5.16%, and 4.65%.

Amgen Inc (4.64%), Boeing Co (4.56%), and Visa Inc Class A (4.45%) have a slightly smaller but still significant weight. McDonald’s Corp and Honeywell International Inc are also represented in the DIA’s holdings at 4.4% and 4.18%.

XLE - Holdings

XLE HoldingsWeight
Exxon Mobil Corp23.7%
Chevron Corp20.03%
ConocoPhillips4.64%
EOG Resources Inc4.46%
Schlumberger Ltd4.43%
Marathon Petroleum Corp4.17%
Pioneer Natural Resources Co4.08%
Phillips 664.07%
Kinder Morgan Inc Class P3.85%
Williams Companies Inc3.5%

XLE’s Top Holdings are Exxon Mobil Corp, Chevron Corp, ConocoPhillips, EOG Resources Inc, and Schlumberger Ltd at 23.7%, 20.03%, 4.64%, 4.46%, and 4.43%.

Marathon Petroleum Corp (4.17%), Pioneer Natural Resources Co (4.08%), and Phillips 66 (4.07%) have a slightly smaller but still significant weight. Kinder Morgan Inc Class P and Williams Companies Inc are also represented in the XLE’s holdings at 3.85% and 3.5%.

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Risk Analysis

DIAXLE
Mean Return1.130.32
R-squared93.3161.84
Std. Deviation13.6827.52
Alpha-0.94-11.98
Beta0.971.54
Sharpe Ratio0.940.12
Treynor Ratio13.07-0.4

The SPDR Dow Jones Industrial Average ETF Trust (DIA) has a Sharpe Ratio of 0.94 with a Standard Deviation of 13.68 and a Mean Return of 1.13. Its Treynor Ratio is 13.07 while DIA’s R-squared is 93.31. Furthermore, the fund has a Beta of 0.97 and a Alpha of -0.94.

The Energy Select Sector SPDR Fund (XLE) has a R-squared of 61.84 with a Alpha of -11.98 and a Beta of 1.54. Its Mean Return is 0.32 while XLE’s Treynor Ratio is -0.4. Furthermore, the fund has a Sharpe Ratio of 0.12 and a Standard Deviation of 27.52.

DIA’s Mean Return is 0.81 points higher than that of XLE and its R-squared is 31.47 points higher. With a Standard Deviation of 13.68, DIA is slightly less volatile than XLE. The Alpha and Beta of DIA are 11.04 points higher and 0.57 points lower than XLE’s Alpha and Beta.

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Performance

Annual Returns

DIA vs. XLE - Annual Returns

YearDIAXLE
20209.63%-32.56%
201925.09%11.87%
2018-3.6%-18.1%
201727.97%-1.01%
201616.28%27.95%
20150.1%-21.47%
20149.88%-8.61%
201329.41%26.16%
201210.04%5.17%
20118.21%2.98%
201013.87%21.7%

DIA had its best year in 2013 with an annual return of 29.41%. DIA’s worst year over the past decade yielded -3.6% and occurred in 2018. In most years the SPDR Dow Jones Industrial Average ETF Trust provided moderate returns such as in 2014, 2012, and 2010 where annual returns amounted to 9.88%, 10.04%, and 13.87% respectively.

The year 2016 was the strongest year for XLE, returning 27.95% on an annual basis. The poorest year for XLE in the last ten years was 2020, with a yield of -32.56%. Most years the Energy Select Sector SPDR Fund has given investors modest returns, such as in 2017, 2011, and 2012, when gains were -1.01%, 2.98%, and 5.17% respectively.

Portfolio Growth

DIA vs. XLE - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
DIA$10,000$37,96513.35%
XLE$10,000$9,3391.28%

A $10,000 investment in DIA would have resulted in a final balance of $37,965. This is a profit of $27,965 over 11 years and amounts to a compound annual growth rate (CAGR) of 13.35%.

With a $10,000 investment in XLE, the end total would have been $9,339. This equates to a $-661 profit over 11 years and a compound annual growth rate (CAGR) of 1.28%.

DIA’s CAGR is 12.07 percentage points higher than that of XLE and as a result, would have yielded $28,626 more on a $10,000 investment. Thus, DIA outperformed XLE by 12.07% annually.


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