GLD vs. XLI: What’s The Difference?

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

The expense ratio of GLD is 0.28 percentage points higher than XLI’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 XLI over the past ten years.

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

Summary

GLD XLI
Name SPDR Gold Shares Industrial Select Sector SPDR Fund
Category N/A Industrials
Issuer SPDR State Street Global Advisors SPDR State Street Global Advisors
AUM 59.26B 19.33B
Avg. Return 5.81% 14.44%
Div. Yield 0.0% 1.25%
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 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%.

GLD’s dividend yield is 1.25% lower than that of XLI (0.0% vs. 1.25%). Also, GLD yielded on average 8.64% less per year over the past decade (5.81% vs. 14.44%). The expense ratio of GLD is 0.28 percentage points higher than XLI’s (0.4% vs. 0.12%).

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Fund Composition

Industry Exposure

GLD vs. XLI - Industry Exposure

GLD XLI
Technology 0.0% 1.82%
Industrials 0.0% 97.49%
Energy 0.0% 0.0%
Communication Services 0.0% 0.0%
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% 0.69%
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 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%.

GLD is 1.82% less exposed to the Technology sector than XLI (0.0% vs 1.82%). GLD’s exposure to Industrials and Energy stocks is 97.49% lower and 0.00% lower respectively (0.0% vs. 97.49% and 0.0% vs. 0.0%). In total, Consumer Cyclical, Financial Services, and Real Estate also make up 0.69% less of the fund’s holdings compared to XLI (0.00% vs. 0.69%).

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%.

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

GLD XLI
Mean Return 0.21 1.14
R-squared 16.21 78.97
Std. Deviation 16.58 17.13
Alpha 3.91 2.38
Beta 0.48 1.08
Sharpe Ratio 0.12 0.76
Treynor Ratio 1.21 11.34

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

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

GLD’s Mean Return is 0.93 points lower than that of XLI and its R-squared is 62.76 points lower. With a Standard Deviation of 16.58, GLD is slightly less volatile than XLI. The Alpha and Beta of GLD are 1.53 points higher and 0.60 points lower than XLI’s Alpha and Beta.

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Performance

Annual Returns

GLD vs. XLI - Annual Returns

Year GLD XLI
2020 23.68% 11.0%
2019 18.36% 29.11%
2018 -1.54% -13.1%
2017 11.41% 23.85%
2016 8.69% 19.93%
2015 -11.78% -4.27%
2014 -0.58% 10.44%
2013 -28.09% 40.44%
2012 5.26% 14.86%
2011 11.2% -1.01%
2010 27.25% 27.62%

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 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

GLD vs. XLI - Portfolio Growth

Fund Initial Balance Final Balance CAGR
GLD $10,000 $16,395 5.81%
XLI $10,000 $39,853 14.44%

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 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%.

GLD’s CAGR is 8.64 percentage points lower than that of XLI and as a result, would have yielded $23,458 less on a $10,000 investment. Thus, GLD performed worse than XLI by 8.64% annually.


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