The SPDR Dow Jones Industrial Average ETF Trust (DIA) and the Consumer Discretionary Select Sector SPDR Fund (XLY) are both among the Top 100 ETFs. DIA is a SPDR State Street Global Advisors Large Value fund and XLY is a SPDR State Street Global Advisors Consumer Cyclical fund. So, what’s the difference between DIA and XLY? And which fund is better?
The expense ratio of DIA is 0.04 percentage points higher than XLY’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 XLY over the past 11 years.
In this article, we’ll compare DIA vs. XLY. We’ll look at risk metrics and performance, as well as at their portfolio growth and industry exposure. Moreover, I’ll also discuss DIA’s and XLY’s fund composition, holdings, and annual returns and examine how these affect their overall returns.
|Name||SPDR Dow Jones Industrial Average ETF Trust||Consumer Discretionary Select Sector SPDR Fund|
|Category||Large Value||Consumer Cyclical|
|Issuer||SPDR State Street Global Advisors||SPDR State Street Global Advisors|
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 Consumer Discretionary Select Sector SPDR Fund (XLY) is a Consumer Cyclical fund that is issued by SPDR State Street Global Advisors. It currently has 20.21B total assets under management and has yielded an average annual return of 18.86% over the past 10 years. The fund has a dividend yield of 0.63% with an expense ratio of 0.12%.
DIA’s dividend yield is 0.98% higher than that of XLY (1.61% vs. 0.63%). Also, DIA yielded on average 5.51% less per year over the past decade (13.35% vs. 18.86%). The expense ratio of DIA is 0.04 percentage points higher than XLY’s (0.16% vs. 0.12%).
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 Consumer Discretionary Select Sector SPDR Fund (XLY) has the most exposure to the Consumer Cyclical sector at 94.1%. This is followed by Consumer Defensive and Technology at 5.34% and 0.57% respectively. Financial Services (0.0%), Real Estate (0.0%), and Healthcare (0.0%) only make up 0.00% of the fund’s total assets.
XLY’s mid-section with moderate exposure is comprised of Utilities, Communication Services, Energy, Industrials, and Technology stocks at 0.0%, 0.0%, 0.0%, 0.0%, and 0.57%.
DIA is 20.68% more exposed to the Financial Services sector than XLY (20.68% vs 0.0%). DIA’s exposure to Healthcare and Technology stocks is 17.92% higher and 16.75% higher respectively (17.92% vs. 0.0% and 17.32% vs. 0.57%). In total, Utilities, Basic Materials, and Energy also make up 3.21% more of the fund’s holdings compared to XLY (3.21% vs. 0.00%).
|UnitedHealth Group Inc||7.63%|
|Goldman Sachs Group Inc||7.23%|
|The Home Depot Inc||6.07%|
|Visa Inc Class A||4.45%|
|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%.
|The Home Depot Inc||8.74%|
|Nike Inc B||4.45%|
|Lowe’s Companies Inc||3.58%|
|Booking Holdings Inc||2.35%|
|TJX Companies Inc||2.12%|
XLY’s Top Holdings are Amazon.com Inc, Tesla Inc, The Home Depot Inc, McDonald’s Corp, and Nike Inc B at 22.9%, 13.5%, 8.74%, 4.5%, and 4.45%.
Lowe’s Companies Inc (3.58%), Starbucks Corp (3.44%), and Target Corp (3.12%) have a slightly smaller but still significant weight. Booking Holdings Inc and TJX Companies Inc are also represented in the XLY’s holdings at 2.35% and 2.12%.
The SPDR Dow Jones Industrial Average ETF Trust (DIA) has a Alpha of -0.94 with a Mean Return of 1.13 and a Sharpe Ratio of 0.94. Its R-squared is 93.31 while DIA’s Beta is 0.97. Furthermore, the fund has a Standard Deviation of 13.68 and a Treynor Ratio of 13.07.
The Consumer Discretionary Select Sector SPDR Fund (XLY) has a Mean Return of 1.47 with a Sharpe Ratio of 1.06 and a Treynor Ratio of 16.69. Its Alpha is 6.96 while XLY’s Standard Deviation is 15.97. Furthermore, the fund has a R-squared of 80.84 and a Beta of 1.02.
DIA’s Mean Return is 0.34 points lower than that of XLY and its R-squared is 12.47 points higher. With a Standard Deviation of 13.68, DIA is slightly less volatile than XLY. The Alpha and Beta of DIA are 7.90 points lower and 0.05 points lower than XLY’s Alpha and Beta.
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 XLY, returning 42.74% on an annual basis. The poorest year for XLY in the last ten years was 2018, with a yield of 1.66%. Most years the Consumer Discretionary Select Sector SPDR Fund has given investors modest returns, such as in 2015, 2017, and 2012, when gains were 9.93%, 22.77%, and 23.6% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
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 XLY, the end total would have been $63,066. This equates to a $53,066 profit over 11 years and a compound annual growth rate (CAGR) of 18.86%.
DIA’s CAGR is 5.51 percentage points lower than that of XLY and as a result, would have yielded $25,101 less on a $10,000 investment. Thus, DIA performed worse than XLY by 5.51% annually.
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