GLD vs. XLC: What’s The Difference?

The SPDR Gold Shares (GLD) and the Communication Services Select Sector SPDR Fund (XLC) are both among the Top 100 ETFs. GLD is a SPDR State Street Global Advisors N/A fund and XLC is a SPDR State Street Global Advisors Communications fund. So, what’s the difference between GLD and XLC? And which fund is better?

The expense ratio of GLD is 0.28 percentage points higher than XLC’s (0.4% vs. 0.12%). GLD also has a lower exposure to the technology sector and a higher standard deviation. Overall, GLD has provided lower returns than XLC over the past ten years.

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

Summary

GLD XLC
Name SPDR Gold Shares Communication Services Select Sector SPDR Fund
Category N/A Communications
Issuer SPDR State Street Global Advisors SPDR State Street Global Advisors
AUM 59.26B 14.09B
Avg. Return 5.81% 29.04%
Div. Yield 0.0% 0.62%
Expense Ratio 0.4% 0.12%

The SPDR Gold Shares (GLD) is a N/A fund that is issued by SPDR State Street Global Advisors. It currently has 59.26B total assets under management and has yielded an average annual return of 5.81% over the past 10 years. The fund has a dividend yield of 0.0% with an expense ratio of 0.4%.

The Communication Services Select Sector SPDR Fund (XLC) is a Communications fund that is issued by SPDR State Street Global Advisors. It currently has 14.09B total assets under management and has yielded an average annual return of 29.04% over the past 10 years. The fund has a dividend yield of 0.62% with an expense ratio of 0.12%.

GLD’s dividend yield is 0.62% lower than that of XLC (0.0% vs. 0.62%). Also, GLD yielded on average 23.23% less per year over the past decade (5.81% vs. 29.04%). The expense ratio of GLD is 0.28 percentage points higher than XLC’s (0.4% vs. 0.12%).

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Fund Composition

Industry Exposure

GLD vs. XLC - Industry Exposure

GLD XLC
Technology 0.0% 0.0%
Industrials 0.0% 0.0%
Energy 0.0% 0.0%
Communication Services 0.0% 100.0%
Utilities 0.0% 0.0%
Healthcare 0.0% 0.0%
Consumer Defensive 0.0% 0.0%
Real Estate 0.0% 0.0%
Financial Services 0.0% 0.0%
Consumer Cyclical 0.0% 0.0%
Basic Materials 0.0% 0.0%

The SPDR Gold Shares (GLD) has the most exposure to the Technology sector at 0.0%. This is followed by Industrials and Energy 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.

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

The Communication Services Select Sector SPDR Fund (XLC) has the most exposure to the Communication Services 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.

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

GLD is 0.00% less exposed to the Technology sector than XLC (0.0% vs 0.0%). GLD’s exposure to Industrials and Energy stocks is 0.00% lower and 0.00% lower respectively (0.0% vs. 0.0% and 0.0% vs. 0.0%). In total, Consumer Cyclical, Financial Services, and Real Estate also make up 0.00% less of the fund’s holdings compared to XLC (0.00% vs. 0.00%).

Holdings

GLD - Holdings

GLD Holdings Weight
Gold Trust 100.0%
N/A 0%
N/A 0%
N/A 0%
N/A 0%
N/A 0%
N/A 0%
N/A 0%
N/A 0%
N/A 0%

GLD’s Top Holdings are Gold Trust, N/A, N/A, N/A, and N/A at 100.0%, 0%, 0%, 0%, and 0%.

N/A (0%), N/A (0%), and N/A (0%) have a slightly smaller but still significant weight. N/A and N/A are also represented in the GLD’s holdings at 0% and 0%.

XLC - Holdings

XLC Holdings Weight
Facebook Inc A 23.75%
Alphabet Inc A 11.49%
Alphabet Inc Class C 11.16%
Netflix Inc 4.78%
Charter Communications Inc A 4.65%
Comcast Corp Class A 4.44%
T-Mobile US Inc 4.41%
The Walt Disney Co 4.39%
AT&T Inc 4.35%
Verizon Communications Inc 4.33%

XLC’s Top Holdings are Facebook Inc A, Alphabet Inc A, Alphabet Inc Class C, Netflix Inc, and Charter Communications Inc A at 23.75%, 11.49%, 11.16%, 4.78%, and 4.65%.

Comcast Corp Class A (4.44%), T-Mobile US Inc (4.41%), and The Walt Disney Co (4.39%) have a slightly smaller but still significant weight. AT&T Inc and Verizon Communications Inc are also represented in the XLC’s holdings at 4.35% and 4.33%.

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Risk Analysis

GLD XLC
Mean Return 0.21 0
R-squared 16.21 0
Std. Deviation 16.58 0
Alpha 3.91 0
Beta 0.48 0
Sharpe Ratio 0.12 0
Treynor Ratio 1.21 0

The SPDR Gold Shares (GLD) has a Mean Return of 0.21 with a Alpha of 3.91 and a Beta of 0.48. Its R-squared is 16.21 while GLD’s Standard Deviation is 16.58. Furthermore, the fund has a Sharpe Ratio of 0.12 and a Treynor Ratio of 1.21.

The Communication Services Select Sector SPDR Fund (XLC) has a R-squared of 0 with a Sharpe Ratio of 0 and a Alpha of 0. Its Mean Return is 0 while XLC’s Beta is 0. Furthermore, the fund has a Standard Deviation of 0 and a Treynor Ratio of 0.

GLD’s Mean Return is 0.21 points higher than that of XLC and its R-squared is 16.21 points higher. With a Standard Deviation of 16.58, GLD is slightly more volatile than XLC. The Alpha and Beta of GLD are 3.91 points higher and 0.48 points higher than XLC’s Alpha and Beta.

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Performance

Annual Returns

GLD vs. XLC - Annual Returns

Year GLD XLC
2020 23.68% 26.85%
2019 18.36% 31.22%
2018 -1.54% 0.0%
2017 11.41% 0.0%
2016 8.69% 0.0%
2015 -11.78% 0.0%
2014 -0.58% 0.0%
2013 -28.09% 0.0%
2012 5.26% 0.0%
2011 11.2% 0.0%
2010 27.25% 0.0%

GLD had its best year in 2010 with an annual return of 27.25%. GLD’s worst year over the past decade yielded -28.09% and occurred in 2013. In most years the SPDR Gold Shares provided moderate returns such as in 2012, 2016, and 2011 where annual returns amounted to 5.26%, 8.69%, and 11.2% respectively.

The year 2019 was the strongest year for XLC, returning 31.22% on an annual basis. The poorest year for XLC in the last ten years was 2018, with a yield of 0.0%. Most years the Communication Services Select Sector SPDR Fund has given investors modest returns, such as in 2014, 2013, and 2012, when gains were 0.0%, 0.0%, and 0.0% respectively.

Portfolio Growth

GLD vs. XLC - Portfolio Growth

Fund Initial Balance Final Balance CAGR
GLD $10,000 $14,638 5.81%
XLC $10,000 $16,645 29.04%

A $10,000 investment in GLD would have resulted in a final balance of $14,638. This is a profit of $4,638 over 2 years and amounts to a compound annual growth rate (CAGR) of 5.81%.

With a $10,000 investment in XLC, the end total would have been $16,645. This equates to a $6,645 profit over 2 years and a compound annual growth rate (CAGR) of 29.04%.

GLD’s CAGR is 23.23 percentage points lower than that of XLC and as a result, would have yielded $2,007 less on a $10,000 investment. Thus, GLD performed worse than XLC by 23.23% annually.


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