The SPDR Gold Shares (GLD) and the Financial Select Sector SPDR Fund (XLF) are both among the Top 100 ETFs. GLD is a SPDR State Street Global Advisors N/A fund and XLF is a SPDR State Street Global Advisors Financial fund. So, what’s the difference between GLD and XLF? And which fund is better?
The expense ratio of GLD is 0.28 percentage points higher than XLF’s (0.4% vs. 0.12%). GLD also has a lower exposure to the technology sector and a lower standard deviation. Overall, GLD has provided lower returns than XLF over the past ten years.
In this article, we’ll compare GLD vs. XLF. We’ll look at industry exposure and holdings, as well as at their risk metrics and fund composition. Moreover, I’ll also discuss GLD’s and XLF’s portfolio growth, performance, and annual returns and examine how these affect their overall returns.
|Name||SPDR Gold Shares||Financial Select Sector SPDR Fund|
|Issuer||SPDR State Street Global Advisors||SPDR State Street Global Advisors|
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 Financial Select Sector SPDR Fund (XLF) is a Financial fund that is issued by SPDR State Street Global Advisors. It currently has 40.81B total assets under management and has yielded an average annual return of 12.17% over the past 10 years. The fund has a dividend yield of 1.57% with an expense ratio of 0.12%.
GLD’s dividend yield is 1.57% lower than that of XLF (0.0% vs. 1.57%). Also, GLD yielded on average 6.36% less per year over the past decade (5.81% vs. 12.17%). The expense ratio of GLD is 0.28 percentage points higher than XLF’s (0.4% vs. 0.12%).
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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 Financial Select Sector SPDR Fund (XLF) has the most exposure to the Financial Services sector at 100.0%. This is followed by Technology and Industrials at 0.0% and 0.0% respectively. Consumer Cyclical (0.0%), Real Estate (0.0%), and Consumer Defensive (0.0%) only make up 0.00% of the fund’s total assets.
XLF’s mid-section with moderate exposure is comprised of Healthcare, Utilities, Communication Services, 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 XLF (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 100.00% less of the fund’s holdings compared to XLF (0.00% vs. 100.00%).
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%.
|Berkshire Hathaway Inc Class B||12.83%|
|JPMorgan Chase & Co||11.47%|
|Bank of America Corp||7.57%|
|Wells Fargo & Co||4.56%|
|Goldman Sachs Group Inc||3.15%|
|Charles Schwab Corp||2.66%|
|American Express Co||2.62%|
XLF’s Top Holdings are Berkshire Hathaway Inc Class B, JPMorgan Chase & Co, Bank of America Corp, Wells Fargo & Co, and Citigroup Inc at 12.83%, 11.47%, 7.57%, 4.56%, and 3.56%.
Morgan Stanley (3.32%), Goldman Sachs Group Inc (3.15%), and BlackRock Inc (3.02%) have a slightly smaller but still significant weight. Charles Schwab Corp and American Express Co are also represented in the XLF’s holdings at 2.66% and 2.62%.
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The SPDR Gold Shares (GLD) has a Treynor Ratio of 1.21 with a Mean Return of 0.21 and a Standard Deviation of 16.58. Its Beta is 0.48 while GLD’s Alpha is 3.91. Furthermore, the fund has a R-squared of 16.21 and a Sharpe Ratio of 0.12.
The Financial Select Sector SPDR Fund (XLF) has a R-squared of 73.26 with a Treynor Ratio of 11.25 and a Alpha of 2.63. Its Beta is 1.15 while XLF’s Standard Deviation is 18.86. Furthermore, the fund has a Mean Return of 1.21 and a Sharpe Ratio of 0.74.
GLD’s Mean Return is 1.00 points lower than that of XLF and its R-squared is 57.05 points lower. With a Standard Deviation of 16.58, GLD is slightly less volatile than XLF. The Alpha and Beta of GLD are 1.28 points higher and 0.67 points lower than XLF’s Alpha and Beta.
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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 2013 was the strongest year for XLF, returning 35.37% on an annual basis. The poorest year for XLF in the last ten years was 2011, with a yield of -17.16%. Most years the Financial Select Sector SPDR Fund has given investors modest returns, such as in 2010, 2014, and 2017, when gains were 11.97%, 15.02%, and 22.03% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in GLD would have resulted in a final balance of $16,395. This is a profit of $6,395 over 11 years and amounts to a compound annual growth rate (CAGR) of 5.81%.
With a $10,000 investment in XLF, the end total would have been $30,782. This equates to a $20,782 profit over 11 years and a compound annual growth rate (CAGR) of 12.17%.
GLD’s CAGR is 6.36 percentage points lower than that of XLF and as a result, would have yielded $14,387 less on a $10,000 investment. Thus, GLD performed worse than XLF by 6.36% annually.
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