The iShares S&P 500 Value ETF (IVE) and the Communication Services Select Sector SPDR Fund (XLC) are both among the Top 100 ETFs. IVE is a iShares Large Value fund and XLC is a SPDR State Street Global Advisors Communications fund. So, what’s the difference between IVE and XLC? And which fund is better?
The expense ratio of IVE is 0.06 percentage points higher than XLC’s (0.18% vs. 0.12%). IVE also has a higher exposure to the financial services sector and a higher standard deviation. Overall, IVE has provided lower returns than XLC over the past 2 years.
In this article, we’ll compare IVE vs. XLC. We’ll look at risk metrics and industry exposure, as well as at their portfolio growth and fund composition. Moreover, I’ll also discuss IVE’s and XLC’s holdings, annual returns, and performance and examine how these affect their overall returns.
|Name||iShares S&P 500 Value ETF||Communication Services Select Sector SPDR Fund|
|Issuer||iShares||SPDR State Street Global Advisors|
The iShares S&P 500 Value ETF (IVE) is a Large Value fund that is issued by iShares. It currently has 22.4B total assets under management and has yielded an average annual return of 11.68% over the past 10 years. The fund has a dividend yield of 1.88% with an expense ratio of 0.18%.
The Communication Services Select Sector SPDR Fund (XLC) is a Communications fund that is issued by SPDR State Street Global Advisors. It currently has 14.09B total assets under management and has yielded an average annual return of 29.04% over the past 10 years. The fund has a dividend yield of 0.62% with an expense ratio of 0.12%.
IVE’s dividend yield is 1.26% higher than that of XLC (1.88% vs. 0.62%). Also, IVE yielded on average 17.35% less per year over the past decade (11.68% vs. 29.04%). The expense ratio of IVE is 0.06 percentage points higher than XLC’s (0.18% vs. 0.12%).
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The iShares S&P 500 Value ETF (IVE) has the most exposure to the Financial Services sector at 22.06%. This is followed by Healthcare and Industrials at 15.4% and 12.19% respectively. Real Estate (4.38%), Utilities (4.82%), and Energy (5.43%) only make up 14.63% of the fund’s total assets.
IVE’s mid-section with moderate exposure is comprised of Communication Services, Consumer Cyclical, Consumer Defensive, Technology, and Industrials stocks at 6.4%, 7.68%, 9.23%, 9.41%, and 12.19%.
The Communication Services Select Sector SPDR Fund (XLC) has the most exposure to the Communication Services 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.
XLC’s mid-section with moderate exposure is comprised of Consumer Defensive, Healthcare, Utilities, Energy, and Industrials stocks at 0.0%, 0.0%, 0.0%, 0.0%, and 0.0%.
IVE is 22.06% more exposed to the Financial Services sector than XLC (22.06% vs 0.0%). IVE’s exposure to Healthcare and Industrials stocks is 15.40% higher and 12.19% higher respectively (15.4% vs. 0.0% and 12.19% vs. 0.0%). In total, Real Estate, Utilities, and Energy also make up 14.63% more of the fund’s holdings compared to XLC (14.63% vs. 0.00%).
|Berkshire Hathaway Inc Class B||3.05%|
|JPMorgan Chase & Co||2.65%|
|The Walt Disney Co||1.85%|
|Bank of America Corp||1.67%|
|Johnson & Johnson||1.57%|
|Exxon Mobil Corp||1.41%|
|Cisco Systems Inc||1.35%|
|Verizon Communications Inc||1.33%|
IVE’s Top Holdings are Berkshire Hathaway Inc Class B, JPMorgan Chase & Co, The Walt Disney Co, Bank of America Corp, and Johnson & Johnson at 3.05%, 2.65%, 1.85%, 1.67%, and 1.57%.
Exxon Mobil Corp (1.41%), Pfizer Inc (1.38%), and Cisco Systems Inc (1.35%) have a slightly smaller but still significant weight. Verizon Communications Inc and Intel Corp are also represented in the IVE’s holdings at 1.33% and 1.25%.
|Facebook Inc A||23.75%|
|Alphabet Inc A||11.49%|
|Alphabet Inc Class C||11.16%|
|Charter Communications Inc A||4.65%|
|Comcast Corp Class A||4.44%|
|T-Mobile US Inc||4.41%|
|The Walt Disney Co||4.39%|
|Verizon Communications Inc||4.33%|
XLC’s Top Holdings are Facebook Inc A, Alphabet Inc A, Alphabet Inc Class C, Netflix Inc, and Charter Communications Inc A at 23.75%, 11.49%, 11.16%, 4.78%, and 4.65%.
Comcast Corp Class A (4.44%), T-Mobile US Inc (4.41%), and The Walt Disney Co (4.39%) have a slightly smaller but still significant weight. AT&T Inc and Verizon Communications Inc are also represented in the XLC’s holdings at 4.35% and 4.33%.
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The iShares S&P 500 Value ETF (IVE) has a Sharpe Ratio of 0.83 with a Alpha of -2.9 and a Standard Deviation of 14.3. Its Mean Return is 1.05 while IVE’s Beta is 1.01. Furthermore, the fund has a Treynor Ratio of 11.41 and a R-squared of 92.08.
The Communication Services Select Sector SPDR Fund (XLC) has a Mean Return of 0 with a Sharpe Ratio of 0 and a Standard Deviation of 0. Its Treynor Ratio is 0 while XLC’s Beta is 0. Furthermore, the fund has a R-squared of 0 and a Alpha of 0.
IVE’s Mean Return is 1.05 points higher than that of XLC and its R-squared is 92.08 points higher. With a Standard Deviation of 14.3, IVE is slightly more volatile than XLC. The Alpha and Beta of IVE are 2.90 points lower and 1.01 points higher than XLC’s Alpha and Beta.
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IVE had its best year in 2019 with an annual return of 31.71%. IVE’s worst year over the past decade yielded -9.09% and occurred in 2018. In most years the iShares S&P 500 Value ETF provided moderate returns such as in 2014, 2010, and 2017 where annual returns amounted to 12.14%, 14.9%, and 15.19% respectively.
The year 2019 was the strongest year for XLC, returning 31.22% on an annual basis. The poorest year for XLC in the last ten years was 2018, with a yield of 0.0%. Most years the Communication Services Select Sector SPDR Fund has given investors modest returns, such as in 2014, 2013, and 2012, when gains were 0.0%, 0.0%, and 0.0% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in IVE would have resulted in a final balance of $13,334. This is a profit of $3,334 over 2 years and amounts to a compound annual growth rate (CAGR) of 11.68%.
With a $10,000 investment in XLC, the end total would have been $16,645. This equates to a $6,645 profit over 2 years and a compound annual growth rate (CAGR) of 29.04%.
IVE’s CAGR is 17.35 percentage points lower than that of XLC and as a result, would have yielded $3,311 less on a $10,000 investment. Thus, IVE performed worse than XLC by 17.35% annually.
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