DIA vs. XLI: What’s The Difference?

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

The expense ratio of DIA is 0.04 percentage points higher than XLI’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 lower returns than XLI over the past ten years.

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

Summary

DIA XLI
Name SPDR Dow Jones Industrial Average ETF Trust Industrial Select Sector SPDR Fund
Category Large Value Industrials
Issuer SPDR State Street Global Advisors SPDR State Street Global Advisors
AUM 30.46B 19.33B
Avg. Return 13.35% 14.44%
Div. Yield 1.61% 1.25%
Expense Ratio 0.16% 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 Industrial Select Sector SPDR Fund (XLI) is a Industrials fund that is issued by SPDR State Street Global Advisors. It currently has 19.33B total assets under management and has yielded an average annual return of 14.44% over the past 10 years. The fund has a dividend yield of 1.25% with an expense ratio of 0.12%.

DIA’s dividend yield is 0.36% higher than that of XLI (1.61% vs. 1.25%). Also, DIA yielded on average 1.09% less per year over the past decade (13.35% vs. 14.44%). The expense ratio of DIA is 0.04 percentage points higher than XLI’s (0.16% vs. 0.12%).

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Fund Composition

Industry Exposure

DIA vs. XLI - Industry Exposure

DIA XLI
Technology 17.32% 1.82%
Industrials 16.7% 97.49%
Energy 2.0% 0.0%
Communication Services 4.42% 0.0%
Utilities 0.0% 0.0%
Healthcare 17.92% 0.0%
Consumer Defensive 6.3% 0.0%
Real Estate 0.0% 0.0%
Financial Services 20.68% 0.0%
Consumer Cyclical 13.44% 0.69%
Basic Materials 1.21% 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 Industrial Select Sector SPDR Fund (XLI) has the most exposure to the Industrials sector at 97.49%. This is followed by Technology and Consumer Cyclical at 1.82% and 0.69% respectively. Financial Services (0.0%), Real Estate (0.0%), and Consumer Defensive (0.0%) only make up 0.00% of the fund’s total assets.

XLI’s mid-section with moderate exposure is comprised of Healthcare, Utilities, Communication Services, Energy, and Consumer Cyclical stocks at 0.0%, 0.0%, 0.0%, 0.0%, and 0.69%.

DIA is 20.68% more exposed to the Financial Services sector than XLI (20.68% vs 0.0%). DIA’s exposure to Healthcare and Technology stocks is 17.92% higher and 15.50% higher respectively (17.92% vs. 0.0% and 17.32% vs. 1.82%). In total, Utilities, Basic Materials, and Energy also make up 3.21% more of the fund’s holdings compared to XLI (3.21% vs. 0.00%).

Holdings

DIA - Holdings

DIA Holdings Weight
UnitedHealth Group Inc 7.63%
Goldman Sachs Group Inc 7.23%
The Home Depot Inc 6.07%
Microsoft Corp 5.16%
Salesforce.com Inc 4.65%
Amgen Inc 4.64%
Boeing Co 4.56%
Visa Inc Class A 4.45%
McDonald’s Corp 4.4%
Honeywell International Inc 4.18%

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%.

XLI - Holdings

XLI Holdings Weight
Honeywell International Inc 4.9%
United Parcel Service Inc Class B 4.84%
Union Pacific Corp 4.7%
Boeing Co 4.24%
Raytheon Technologies Corp 4.16%
Caterpillar Inc 3.84%
General Electric Co 3.8%
3M Co 3.7%
Deere & Co 3.54%
Lockheed Martin Corp 2.98%

XLI’s Top Holdings are Honeywell International Inc, United Parcel Service Inc Class B, Union Pacific Corp, Boeing Co, and Raytheon Technologies Corp at 4.9%, 4.84%, 4.7%, 4.24%, and 4.16%.

Caterpillar Inc (3.84%), General Electric Co (3.8%), and 3M Co (3.7%) have a slightly smaller but still significant weight. Deere & Co and Lockheed Martin Corp are also represented in the XLI’s holdings at 3.54% and 2.98%.

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Risk Analysis

DIA XLI
Mean Return 1.13 1.14
R-squared 93.31 78.97
Std. Deviation 13.68 17.13
Alpha -0.94 2.38
Beta 0.97 1.08
Sharpe Ratio 0.94 0.76
Treynor Ratio 13.07 11.34

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

The Industrial Select Sector SPDR Fund (XLI) has a Beta of 1.08 with a Treynor Ratio of 11.34 and a Sharpe Ratio of 0.76. Its R-squared is 78.97 while XLI’s Alpha is 2.38. Furthermore, the fund has a Mean Return of 1.14 and a Standard Deviation of 17.13.

DIA’s Mean Return is 0.01 points lower than that of XLI and its R-squared is 14.34 points higher. With a Standard Deviation of 13.68, DIA is slightly less volatile than XLI. The Alpha and Beta of DIA are 3.32 points lower and 0.11 points lower than XLI’s Alpha and Beta.

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Performance

Annual Returns

DIA vs. XLI - Annual Returns

Year DIA XLI
2020 9.63% 11.0%
2019 25.09% 29.11%
2018 -3.6% -13.1%
2017 27.97% 23.85%
2016 16.28% 19.93%
2015 0.1% -4.27%
2014 9.88% 10.44%
2013 29.41% 40.44%
2012 10.04% 14.86%
2011 8.21% -1.01%
2010 13.87% 27.62%

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 2013 was the strongest year for XLI, returning 40.44% on an annual basis. The poorest year for XLI in the last ten years was 2018, with a yield of -13.1%. Most years the Industrial Select Sector SPDR Fund has given investors modest returns, such as in 2020, 2012, and 2016, when gains were 11.0%, 14.86%, and 19.93% respectively.

Portfolio Growth

DIA vs. XLI - Portfolio Growth

Fund Initial Balance Final Balance CAGR
DIA $10,000 $37,965 13.35%
XLI $10,000 $39,853 14.44%

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 XLI, the end total would have been $39,853. This equates to a $29,853 profit over 11 years and a compound annual growth rate (CAGR) of 14.44%.

DIA’s CAGR is 1.09 percentage points lower than that of XLI and as a result, would have yielded $1,888 less on a $10,000 investment. Thus, DIA performed worse than XLI by 1.09% annually.


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