The iShares Core S&P 500 ETF (IVV) and the Industrial Select Sector SPDR Fund (XLI) are both among the Top 100 ETFs. IVV is a iShares Large Blend fund and XLI is a SPDR State Street Global Advisors Industrials fund. So, what’s the difference between IVV and XLI? And which fund is better?

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

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

Summary

IVVXLI
NameiShares Core S&P 500 ETFIndustrial Select Sector SPDR Fund
CategoryLarge BlendIndustrials
IssueriSharesSPDR State Street Global Advisors
AUM294.95B19.33B
Avg. Return14.48%14.44%
Div. Yield1.28%1.25%
Expense Ratio0.03%0.12%

The iShares Core S&P 500 ETF (IVV) is a Large Blend fund that is issued by iShares. It currently has 294.95B total assets under management and has yielded an average annual return of 14.48% over the past 10 years. The fund has a dividend yield of 1.28% 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%.

IVV’s dividend yield is 0.03% higher than that of XLI (1.28% vs. 1.25%). Also, IVV yielded on average 0.03% more per year over the past decade (14.48% vs. 14.44%). The expense ratio of IVV is 0.09 percentage points lower than XLI’s (0.03% vs. 0.12%).

Fund Composition

Industry Exposure

IVV vs. XLI - Industry Exposure

IVVXLI
Technology24.64%1.82%
Industrials8.73%97.49%
Energy2.55%0.0%
Communication Services11.24%0.0%
Utilities2.49%0.0%
Healthcare13.52%0.0%
Consumer Defensive6.34%0.0%
Real Estate2.63%0.0%
Financial Services13.86%0.0%
Consumer Cyclical11.74%0.69%
Basic Materials2.27%0.0%

The iShares Core S&P 500 ETF (IVV) has the most exposure to the Technology sector at 24.64%. This is followed by Financial Services and Healthcare at 13.86% and 13.52% respectively. Utilities (2.49%), Energy (2.55%), and Real Estate (2.63%) only make up 7.67% of the fund’s total assets.

IVV’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Healthcare stocks at 6.34%, 8.73%, 11.24%, 11.74%, and 13.52%.

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%.

IVV is 22.82% more exposed to the Technology sector than XLI (24.64% vs 1.82%). IVV’s exposure to Financial Services and Healthcare stocks is 13.86% higher and 13.52% higher respectively (13.86% vs. 0.0% and 13.52% vs. 0.0%). In total, Utilities, Energy, and Real Estate also make up 7.67% more of the fund’s holdings compared to XLI (7.67% vs. 0.00%).

Holdings

IVV - Holdings

IVV HoldingsWeight
Apple Inc6.14%
Microsoft Corp5.76%
Amazon.com Inc3.83%
Facebook Inc Class A2.29%
Alphabet Inc Class A2.17%
Alphabet Inc Class C2.07%
Tesla Inc1.42%
Berkshire Hathaway Inc Class B1.42%
NVIDIA Corp1.3%
JPMorgan Chase & Co1.23%

IVV’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc Class A, and Alphabet Inc Class A at 6.14%, 5.76%, 3.83%, 2.29%, and 2.17%.

Alphabet Inc Class C (2.07%), Tesla Inc (1.42%), and Berkshire Hathaway Inc Class B (1.42%) have a slightly smaller but still significant weight. NVIDIA Corp and JPMorgan Chase & Co are also represented in the IVV’s holdings at 1.3% and 1.23%.

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%.

Performance

Annual Returns

IVV vs. XLI - Annual Returns

YearIVVXLI
202018.37%11.0%
201931.44%29.11%
2018-4.42%-13.1%
201721.79%23.85%
201611.9%19.93%
20151.34%-4.27%
201413.62%10.44%
201332.31%40.44%
201215.91%14.86%
20112.03%-1.01%
201014.96%27.62%

IVV had its best year in 2013 with an annual return of 32.31%. IVV’s worst year over the past decade yielded -4.42% and occurred in 2018. In most years the iShares Core S&P 500 ETF provided moderate returns such as in 2014, 2010, and 2012 where annual returns amounted to 13.62%, 14.96%, and 15.91% 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

IVV vs. XLI - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
IVV$10,000$41,97614.48%
XLI$10,000$39,85314.44%

A $10,000 investment in IVV would have resulted in a final balance of $41,976. This is a profit of $31,976 over 11 years and amounts to a compound annual growth rate (CAGR) of 14.48%.

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%.

IVV’s CAGR is 0.03 percentage points higher than that of XLI and as a result, would have yielded $2,123 more on a $10,000 investment. Thus, IVV outperformed XLI by 0.03% annually.

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