The iShares Core S&P Total U.S. Stock Market ETF (ITOT) and the Health Care Select Sector SPDR Fund (XLV) are both among the Top 100 ETFs. ITOT is a iShares Large Blend fund and XLV is a SPDR State Street Global Advisors Health fund. So, what’s the difference between ITOT and XLV? And which fund is better?
The expense ratio of ITOT is 0.09 percentage points lower than XLV’s (0.03% vs. 0.12%). ITOT also has a higher exposure to the technology sector and a higher standard deviation. Overall, ITOT has provided lower returns than XLV over the past ten years.
In this article, we’ll compare ITOT vs. XLV. We’ll look at portfolio growth and annual returns, as well as at their industry exposure and risk metrics. Moreover, I’ll also discuss ITOT’s and XLV’s performance, fund composition, and holdings and examine how these affect their overall returns.
|Name||iShares Core S&P Total U.S. Stock Market ETF||Health Care Select Sector SPDR Fund|
|Issuer||iShares||SPDR State Street Global Advisors|
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 Health Care Select Sector SPDR Fund (XLV) is a Health fund that is issued by SPDR State Street Global Advisors. It currently has 27.88B total assets under management and has yielded an average annual return of 15.02% over the past 10 years. The fund has a dividend yield of 1.4% with an expense ratio of 0.12%.
ITOT’s dividend yield is 0.20% lower than that of XLV (1.2% vs. 1.4%). Also, ITOT yielded on average 0.43% less per year over the past decade (14.59% vs. 15.02%). The expense ratio of ITOT is 0.09 percentage points lower than XLV’s (0.03% vs. 0.12%).
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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 Health Care Select Sector SPDR Fund (XLV) has the most exposure to the Healthcare 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.
XLV’s mid-section with moderate exposure is comprised of Consumer Defensive, Utilities, Communication Services, Energy, and Industrials stocks at 0.0%, 0.0%, 0.0%, 0.0%, and 0.0%.
ITOT is 24.49% more exposed to the Technology sector than XLV (24.49% vs 0.0%). ITOT’s exposure to Financial Services and Healthcare stocks is 13.69% higher and 86.41% lower respectively (13.69% vs. 0.0% and 13.59% vs. 100.0%). In total, Basic Materials, Energy, and Real Estate also make up 8.65% more of the fund’s holdings compared to XLV (8.65% vs. 0.00%).
|Facebook Inc Class A||1.89%|
|Alphabet Inc Class A||1.79%|
|Alphabet Inc Class C||1.71%|
|Berkshire Hathaway Inc Class B||1.17%|
|JPMorgan Chase & Co||1.02%|
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%.
|Johnson & Johnson||9.19%|
|UnitedHealth Group Inc||8.01%|
|Thermo Fisher Scientific Inc||4.2%|
|Merck & Co Inc||4.17%|
|Eli Lilly and Co||3.87%|
XLV’s Top Holdings are Johnson & Johnson, UnitedHealth Group Inc, Pfizer Inc, Abbott Laboratories, and AbbVie Inc at 9.19%, 8.01%, 4.64%, 4.36%, and 4.21%.
Thermo Fisher Scientific Inc (4.2%), Merck & Co Inc (4.17%), and Eli Lilly and Co (3.87%) have a slightly smaller but still significant weight. Danaher Corp and Medtronic PLC are also represented in the XLV’s holdings at 3.61% and 3.54%.
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The iShares Core S&P Total U.S. Stock Market ETF (ITOT) has a Alpha of -0.54 with a R-squared of 99.4 and a Treynor Ratio of 14.13. Its Mean Return is 1.27 while ITOT’s Sharpe Ratio is 1.04. Furthermore, the fund has a Beta of 1.03 and a Standard Deviation of 14.02.
The Health Care Select Sector SPDR Fund (XLV) has a Standard Deviation of 12.94 with a Sharpe Ratio of 1.13 and a Beta of 0.7. Its R-squared is 58.19 while XLV’s Mean Return is 1.27. Furthermore, the fund has a Alpha of 7.75 and a Treynor Ratio of 21.1.
ITOT’s Mean Return is 0.00 points lower than that of XLV and its R-squared is 41.21 points higher. With a Standard Deviation of 14.02, ITOT is slightly more volatile than XLV. The Alpha and Beta of ITOT are 8.29 points lower and 0.33 points higher than XLV’s Alpha and Beta.
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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 XLV, returning 41.24% on an annual basis. The poorest year for XLV in the last ten years was 2016, with a yield of -2.83%. Most years the Health Care Select Sector SPDR Fund has given investors modest returns, such as in 2011, 2020, and 2012, when gains were 12.44%, 13.33%, and 17.56% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
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 XLV, the end total would have been $44,147. This equates to a $34,147 profit over 11 years and a compound annual growth rate (CAGR) of 15.02%.
ITOT’s CAGR is 0.43 percentage points lower than that of XLV and as a result, would have yielded $1,837 less on a $10,000 investment. Thus, ITOT performed worse than XLV by 0.43% annually.
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