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.
|Name||SPDR Gold Shares||Industrial 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 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%).
FYI: The best way I've found to invest in ETFs is through M1 Finance. It's free and you even get an instant line of credit! Have a look here (link to M1 Finance).
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%).
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%.
|Honeywell International Inc||4.9%|
|United Parcel Service Inc Class B||4.84%|
|Union Pacific Corp||4.7%|
|Raytheon Technologies Corp||4.16%|
|General Electric Co||3.8%|
|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%.
NOTE: The easiest way to add diversification to your portfolio is to invest in real estate through Fundrise. You can become private real estate investor without the burden of property management! Check it out here (link to Fundrise).
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.
FYI: Another great way to get exposure to the real estate sector is by investing in real estate debt. Groundfloor offers fantastic short-term, high-yield bonds that can add diversification to your portfolio!
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.
|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 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.
Over the past years, I have discovered several tools and products that have helped me tremendously on my path to financial freedom:
P.S.: The links below are affiliate links, which means I receive a small commission at no extra cost to you when you sign up for one of the services. Thank you for your support!
1)Personal Capital is simply the best tool out there to track your net worth and plan for financial freedom. Just their retirement planner alone has become an invaluable tool to keep myself on track financially. Try it out, it's free!
2) Take a look at M1 Finance, my favorite broker. I love how easy it is to invest and maintain my portfolio with them. I can set up automatic transfers, rebalance my portfolio with one click and even borrow up to 35% of my assets at super low interest rates!
3) Fundrise is by far the best way I've found to invest in Real Estate. You can diversify your portfolio by investing in their eREITs or even allocate capital to individual properties (without the hassle of managing tenants!).
4) Groundfloor is another great way to get exposure to the real estate sector by investing in short-term, high-yield real estate debt. Current returns are >10% and you can get started with just $10.
5) If you are interested in startup investing, check out Mainvest. I've started allocating a small amount of assets to invest in and support small businesses. Return targets are between 10-25% and you can start with just $100!
To see all of my most up-to-date recommendations, check out the Recommended Tools section.