The iShares Gold Trust (IAU) and the Energy Select Sector SPDR Fund (XLE) are both among the Top 100 ETFs. IAU is a iShares N/A fund and XLE is a SPDR State Street Global Advisors Equity Energy fund. So, what’s the difference between IAU and XLE? And which fund is better?
The expense ratio of IAU is 0.13 percentage points higher than XLE’s (0.25% vs. 0.12%). IAU also has a lower exposure to the technology sector and a lower standard deviation. Overall, IAU has provided higher returns than XLE over the past 11 years.
In this article, we’ll compare IAU vs. XLE. We’ll look at industry exposure and fund composition, as well as at their annual returns and performance. Moreover, I’ll also discuss IAU’s and XLE’s holdings, risk metrics, and portfolio growth and examine how these affect their overall returns.
Summary
| IAU | XLE | |
| Name | iShares Gold Trust | Energy Select Sector SPDR Fund |
| Category | N/A | Equity Energy |
| Issuer | iShares | SPDR State Street Global Advisors |
| AUM | 28.61B | 25.55B |
| Avg. Return | 6.03% | 1.28% |
| Div. Yield | 0.0% | 3.92% |
| Expense Ratio | 0.25% | 0.12% |
The iShares Gold Trust (IAU) is a N/A fund that is issued by iShares. It currently has 28.61B total assets under management and has yielded an average annual return of 6.03% over the past 10 years. The fund has a dividend yield of 0.0% with an expense ratio of 0.25%.
The Energy Select Sector SPDR Fund (XLE) is a Equity Energy fund that is issued by SPDR State Street Global Advisors. It currently has 25.55B total assets under management and has yielded an average annual return of 1.28% over the past 10 years. The fund has a dividend yield of 3.92% with an expense ratio of 0.12%.
IAU’s dividend yield is 3.92% lower than that of XLE (0.0% vs. 3.92%). Also, IAU yielded on average 4.75% more per year over the past decade (6.03% vs. 1.28%). The expense ratio of IAU is 0.13 percentage points higher than XLE’s (0.25% vs. 0.12%).
Fund Composition
Industry Exposure
| IAU | XLE | |
| Technology | 0.0% | 0.0% |
| Industrials | 0.0% | 0.0% |
| Energy | 0.0% | 100.0% |
| 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% | 0.0% |
| Basic Materials | 0.0% | 0.0% |
The iShares Gold Trust (IAU) 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.
IAU’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 Energy Select Sector SPDR Fund (XLE) has the most exposure to the Energy 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.
XLE’s mid-section with moderate exposure is comprised of Consumer Defensive, Healthcare, Utilities, Communication Services, and Industrials stocks at 0.0%, 0.0%, 0.0%, 0.0%, and 0.0%.
IAU is 0.00% less exposed to the Technology sector than XLE (0.0% vs 0.0%). IAU’s exposure to Industrials and Energy stocks is 0.00% lower and 100.00% lower respectively (0.0% vs. 0.0% and 0.0% vs. 100.0%). In total, Consumer Cyclical, Financial Services, and Real Estate also make up 0.00% less of the fund’s holdings compared to XLE (0.00% vs. 0.00%).
Holdings
| IAU Holdings | Weight |
| Gold | 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% |
IAU’s Top Holdings are Gold, 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 IAU’s holdings at 0% and 0%.
| XLE Holdings | Weight |
| Exxon Mobil Corp | 23.7% |
| Chevron Corp | 20.03% |
| ConocoPhillips | 4.64% |
| EOG Resources Inc | 4.46% |
| Schlumberger Ltd | 4.43% |
| Marathon Petroleum Corp | 4.17% |
| Pioneer Natural Resources Co | 4.08% |
| Phillips 66 | 4.07% |
| Kinder Morgan Inc Class P | 3.85% |
| Williams Companies Inc | 3.5% |
XLE’s Top Holdings are Exxon Mobil Corp, Chevron Corp, ConocoPhillips, EOG Resources Inc, and Schlumberger Ltd at 23.7%, 20.03%, 4.64%, 4.46%, and 4.43%.
Marathon Petroleum Corp (4.17%), Pioneer Natural Resources Co (4.08%), and Phillips 66 (4.07%) have a slightly smaller but still significant weight. Kinder Morgan Inc Class P and Williams Companies Inc are also represented in the XLE’s holdings at 3.85% and 3.5%.
Risk Analysis
| IAU | XLE | |
| Mean Return | 0.23 | 0.32 |
| R-squared | 16.03 | 61.84 |
| Std. Deviation | 16.97 | 27.52 |
| Alpha | 4.16 | -11.98 |
| Beta | 0.48 | 1.54 |
| Sharpe Ratio | 0.13 | 0.12 |
| Treynor Ratio | 1.5 | -0.4 |
The iShares Gold Trust (IAU) has a Treynor Ratio of 1.5 with a Standard Deviation of 16.97 and a R-squared of 16.03. Its Beta is 0.48 while IAU’s Sharpe Ratio is 0.13. Furthermore, the fund has a Alpha of 4.16 and a Mean Return of 0.23.
The Energy Select Sector SPDR Fund (XLE) has a Beta of 1.54 with a Alpha of -11.98 and a Mean Return of 0.32. Its Standard Deviation is 27.52 while XLE’s Treynor Ratio is -0.4. Furthermore, the fund has a Sharpe Ratio of 0.12 and a R-squared of 61.84.
IAU’s Mean Return is 0.09 points lower than that of XLE and its R-squared is 45.81 points lower. With a Standard Deviation of 16.97, IAU is slightly less volatile than XLE. The Alpha and Beta of IAU are 16.14 points higher and 1.06 points lower than XLE’s Alpha and Beta.
Performance
Annual Returns
| Year | IAU | XLE |
| 2020 | 23.86% | -32.56% |
| 2019 | 18.54% | 11.87% |
| 2018 | -1.39% | -18.1% |
| 2017 | 11.58% | -1.01% |
| 2016 | 8.85% | 27.95% |
| 2015 | -11.65% | -21.47% |
| 2014 | -0.44% | -8.61% |
| 2013 | -27.96% | 26.16% |
| 2012 | 8.37% | 5.17% |
| 2011 | 8.66% | 2.98% |
| 2010 | 27.93% | 21.7% |
IAU had its best year in 2010 with an annual return of 27.93%. IAU’s worst year over the past decade yielded -27.96% and occurred in 2013. In most years the iShares Gold Trust provided moderate returns such as in 2012, 2011, and 2016 where annual returns amounted to 8.37%, 8.66%, and 8.85% respectively.
The year 2016 was the strongest year for XLE, returning 27.95% on an annual basis. The poorest year for XLE in the last ten years was 2020, with a yield of -32.56%. Most years the Energy Select Sector SPDR Fund has given investors modest returns, such as in 2017, 2011, and 2012, when gains were -1.01%, 2.98%, and 5.17% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| IAU | $10,000 | $16,786 | 6.03% |
| XLE | $10,000 | $9,339 | 1.28% |
A $10,000 investment in IAU would have resulted in a final balance of $16,786. This is a profit of $6,786 over 11 years and amounts to a compound annual growth rate (CAGR) of 6.03%.
With a $10,000 investment in XLE, the end total would have been $9,339. This equates to a $-661 profit over 11 years and a compound annual growth rate (CAGR) of 1.28%.
IAU’s CAGR is 4.75 percentage points higher than that of XLE and as a result, would have yielded $7,447 more on a $10,000 investment. Thus, IAU outperformed XLE by 4.75% annually.
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