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ITOT vs. XLI: What’s The Difference?

The iShares Core S&P Total U.S. Stock Market ETF (ITOT) and the Industrial Select Sector SPDR Fund (XLI) are both among the Top 100 ETFs. ITOT is a iShares Large Blend fund and XLI is a SPDR State Street Global Advisors Industrials fund. So, what’s the difference between ITOT and XLI? And which fund is better?

The expense ratio of ITOT is 0.09 percentage points lower than XLI’s (0.03% vs. 0.12%). ITOT also has a higher exposure to the technology sector and a lower standard deviation. Overall, ITOT has provided higher returns than XLI over the past ten years.

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

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Summary

ITOTXLI
NameiShares Core S&P Total U.S. Stock Market ETFIndustrial Select Sector SPDR Fund
CategoryLarge BlendIndustrials
IssueriSharesSPDR State Street Global Advisors
AUM41.97B19.33B
Avg. Return14.59%14.44%
Div. Yield1.2%1.25%
Expense Ratio0.03%0.12%

The iShares Core S&P Total U.S. Stock Market ETF (ITOT) is a Large Blend fund that is issued by iShares. It currently has 41.97B total assets under management and has yielded an average annual return of 14.59% over the past 10 years. The fund has a dividend yield of 1.2% with an expense ratio of 0.03%.

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%.

ITOT’s dividend yield is 0.05% lower than that of XLI (1.2% vs. 1.25%). Also, ITOT yielded on average 0.15% more per year over the past decade (14.59% vs. 14.44%). The expense ratio of ITOT is 0.09 percentage points lower than XLI’s (0.03% vs. 0.12%).

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Fund Composition

Industry Exposure

ITOT vs. XLI - Industry Exposure

ITOTXLI
Technology24.49%1.82%
Industrials9.21%97.49%
Energy2.51%0.0%
Communication Services10.54%0.0%
Utilities2.35%0.0%
Healthcare13.59%0.0%
Consumer Defensive5.79%0.0%
Real Estate3.67%0.0%
Financial Services13.69%0.0%
Consumer Cyclical11.69%0.69%
Basic Materials2.47%0.0%

The iShares Core S&P Total U.S. Stock Market ETF (ITOT) has the most exposure to the Technology sector at 24.49%. This is followed by Financial Services and Healthcare at 13.69% and 13.59% respectively. Basic Materials (2.47%), Energy (2.51%), and Real Estate (3.67%) only make up 8.65% of the fund’s total assets.

ITOT’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Healthcare stocks at 5.79%, 9.21%, 10.54%, 11.69%, and 13.59%.

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%.

ITOT is 22.67% more exposed to the Technology sector than XLI (24.49% vs 1.82%). ITOT’s exposure to Financial Services and Healthcare stocks is 13.69% higher and 13.59% higher respectively (13.69% vs. 0.0% and 13.59% vs. 0.0%). In total, Basic Materials, Energy, and Real Estate also make up 8.65% more of the fund’s holdings compared to XLI (8.65% vs. 0.00%).

Holdings

ITOT - Holdings

ITOT HoldingsWeight
Apple Inc5.07%
Microsoft Corp4.75%
Amazon.com Inc3.16%
Facebook Inc Class A1.89%
Alphabet Inc Class A1.79%
Alphabet Inc Class C1.71%
Tesla Inc1.17%
Berkshire Hathaway Inc Class B1.17%
NVIDIA Corp1.08%
JPMorgan Chase & Co1.02%

ITOT’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 5.07%, 4.75%, 3.16%, 1.89%, and 1.79%.

Alphabet Inc Class C (1.71%), Tesla Inc (1.17%), and Berkshire Hathaway Inc Class B (1.17%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the ITOT’s holdings at 1.08% and 1.02%.

XLI - Holdings

XLI HoldingsWeight
Honeywell International Inc4.9%
United Parcel Service Inc Class B4.84%
Union Pacific Corp4.7%
Boeing Co4.24%
Raytheon Technologies Corp4.16%
Caterpillar Inc3.84%
General Electric Co3.8%
3M Co3.7%
Deere & Co3.54%
Lockheed Martin Corp2.98%

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

ITOTXLI
Mean Return1.271.14
R-squared99.478.97
Std. Deviation14.0217.13
Alpha-0.542.38
Beta1.031.08
Sharpe Ratio1.040.76
Treynor Ratio14.1311.34

The iShares Core S&P Total U.S. Stock Market ETF (ITOT) has a Mean Return of 1.27 with a R-squared of 99.4 and a Sharpe Ratio of 1.04. Its Standard Deviation is 14.02 while ITOT’s Alpha is -0.54. Furthermore, the fund has a Beta of 1.03 and a Treynor Ratio of 14.13.

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

ITOT’s Mean Return is 0.13 points higher than that of XLI and its R-squared is 20.43 points higher. With a Standard Deviation of 14.02, ITOT is slightly less volatile than XLI. The Alpha and Beta of ITOT are 2.92 points lower and 0.05 points lower than XLI’s Alpha and Beta.

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Performance

Annual Returns

ITOT vs. XLI - Annual Returns

YearITOTXLI
202020.75%11.0%
201930.87%29.11%
2018-5.27%-13.1%
201721.23%23.85%
201612.59%19.93%
20150.96%-4.27%
201413.01%10.44%
201332.67%40.44%
201215.98%14.86%
20111.55%-1.01%
201016.15%27.62%

ITOT had its best year in 2013 with an annual return of 32.67%. ITOT’s worst year over the past decade yielded -5.27% and occurred in 2018. In most years the iShares Core S&P Total U.S. Stock Market ETF provided moderate returns such as in 2014, 2012, and 2010 where annual returns amounted to 13.01%, 15.98%, and 16.15% 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

ITOT vs. XLI - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
ITOT$10,000$42,31014.59%
XLI$10,000$39,85314.44%

A $10,000 investment in ITOT would have resulted in a final balance of $42,310. This is a profit of $32,310 over 11 years and amounts to a compound annual growth rate (CAGR) of 14.59%.

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%.

ITOT’s CAGR is 0.15 percentage points higher than that of XLI and as a result, would have yielded $2,457 more on a $10,000 investment. Thus, ITOT outperformed XLI by 0.15% annually.


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