The iShares Core S&P Total U.S. Stock Market ETF (ITOT) and the Consumer Discretionary Select Sector SPDR Fund (XLY) are both among the Top 100 ETFs. ITOT is a iShares Large Blend fund and XLY is a SPDR State Street Global Advisors Consumer Cyclical fund. So, what’s the difference between ITOT and XLY? And which fund is better?
The expense ratio of ITOT is 0.09 percentage points lower than XLY’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 lower returns than XLY over the past ten years.
In this article, we’ll compare ITOT vs. XLY. We’ll look at industry exposure and annual returns, as well as at their performance and portfolio growth. Moreover, I’ll also discuss ITOT’s and XLY’s risk metrics, fund composition, and holdings and examine how these affect their overall returns.
|Name||iShares Core S&P Total U.S. Stock Market ETF||Consumer Discretionary Select Sector SPDR Fund|
|Category||Large Blend||Consumer Cyclical|
|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 Consumer Discretionary Select Sector SPDR Fund (XLY) is a Consumer Cyclical fund that is issued by SPDR State Street Global Advisors. It currently has 20.21B total assets under management and has yielded an average annual return of 18.86% over the past 10 years. The fund has a dividend yield of 0.63% with an expense ratio of 0.12%.
ITOT’s dividend yield is 0.57% higher than that of XLY (1.2% vs. 0.63%). Also, ITOT yielded on average 4.27% less per year over the past decade (14.59% vs. 18.86%). The expense ratio of ITOT is 0.09 percentage points lower than XLY’s (0.03% vs. 0.12%).
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 Consumer Discretionary Select Sector SPDR Fund (XLY) has the most exposure to the Consumer Cyclical sector at 94.1%. This is followed by Consumer Defensive and Technology at 5.34% and 0.57% respectively. Financial Services (0.0%), Real Estate (0.0%), and Healthcare (0.0%) only make up 0.00% of the fund’s total assets.
XLY’s mid-section with moderate exposure is comprised of Utilities, Communication Services, Energy, Industrials, and Technology stocks at 0.0%, 0.0%, 0.0%, 0.0%, and 0.57%.
ITOT is 23.92% more exposed to the Technology sector than XLY (24.49% vs 0.57%). 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 XLY (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%.
|The Home Depot Inc||8.74%|
|Nike Inc B||4.45%|
|Lowe’s Companies Inc||3.58%|
|Booking Holdings Inc||2.35%|
|TJX Companies Inc||2.12%|
XLY’s Top Holdings are Amazon.com Inc, Tesla Inc, The Home Depot Inc, McDonald’s Corp, and Nike Inc B at 22.9%, 13.5%, 8.74%, 4.5%, and 4.45%.
Lowe’s Companies Inc (3.58%), Starbucks Corp (3.44%), and Target Corp (3.12%) have a slightly smaller but still significant weight. Booking Holdings Inc and TJX Companies Inc are also represented in the XLY’s holdings at 2.35% and 2.12%.
The iShares Core S&P Total U.S. Stock Market ETF (ITOT) has a Treynor Ratio of 14.13 with a Standard Deviation of 14.02 and a Mean Return of 1.27. Its Sharpe Ratio is 1.04 while ITOT’s R-squared is 99.4. Furthermore, the fund has a Alpha of -0.54 and a Beta of 1.03.
The Consumer Discretionary Select Sector SPDR Fund (XLY) has a Treynor Ratio of 16.69 with a Beta of 1.02 and a Sharpe Ratio of 1.06. Its Alpha is 6.96 while XLY’s Standard Deviation is 15.97. Furthermore, the fund has a Mean Return of 1.47 and a R-squared of 80.84.
ITOT’s Mean Return is 0.20 points lower than that of XLY and its R-squared is 18.56 points higher. With a Standard Deviation of 14.02, ITOT is slightly less volatile than XLY. The Alpha and Beta of ITOT are 7.50 points lower and 0.01 points higher than XLY’s Alpha and Beta.
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 XLY, returning 42.74% on an annual basis. The poorest year for XLY in the last ten years was 2018, with a yield of 1.66%. Most years the Consumer Discretionary Select Sector SPDR Fund has given investors modest returns, such as in 2015, 2017, and 2012, when gains were 9.93%, 22.77%, and 23.6% 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 XLY, the end total would have been $63,066. This equates to a $53,066 profit over 11 years and a compound annual growth rate (CAGR) of 18.86%.
ITOT’s CAGR is 4.27 percentage points lower than that of XLY and as a result, would have yielded $20,756 less on a $10,000 investment. Thus, ITOT performed worse than XLY by 4.27% annually.
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