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IWR vs. XLE: What’s The Difference?

The iShares Russell Mid-Cap ETF (IWR) and the Energy Select Sector SPDR Fund (XLE) are both among the Top 100 ETFs. IWR is a iShares Mid-Cap Blend fund and XLE is a SPDR State Street Global Advisors Equity Energy fund. So, what’s the difference between IWR and XLE? And which fund is better?

The expense ratio of IWR is 0.07 percentage points higher than XLE’s (0.19% vs. 0.12%). IWR also has a higher exposure to the technology sector and a lower standard deviation. Overall, IWR has provided higher returns than XLE over the past ten years.

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

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Summary

IWRXLE
NameiShares Russell Mid-Cap ETFEnergy Select Sector SPDR Fund
CategoryMid-Cap BlendEquity Energy
IssueriSharesSPDR State Street Global Advisors
AUM29.84B25.55B
Avg. Return14.15%1.28%
Div. Yield0.99%3.92%
Expense Ratio0.19%0.12%

The iShares Russell Mid-Cap ETF (IWR) is a Mid-Cap Blend fund that is issued by iShares. It currently has 29.84B total assets under management and has yielded an average annual return of 14.15% over the past 10 years. The fund has a dividend yield of 0.99% with an expense ratio of 0.19%.

The Energy Select Sector SPDR Fund (XLE) is a Equity Energy fund that is issued by SPDR State Street Global Advisors. It currently has 25.55B total assets under management and has yielded an average annual return of 1.28% over the past 10 years. The fund has a dividend yield of 3.92% with an expense ratio of 0.12%.

IWR’s dividend yield is 2.93% lower than that of XLE (0.99% vs. 3.92%). Also, IWR yielded on average 12.87% more per year over the past decade (14.15% vs. 1.28%). The expense ratio of IWR is 0.07 percentage points higher than XLE’s (0.19% vs. 0.12%).

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Fund Composition

Industry Exposure

IWR vs. XLE - Industry Exposure

IWRXLE
Technology19.67%0.0%
Industrials14.54%0.0%
Energy3.48%100.0%
Communication Services4.64%0.0%
Utilities4.46%0.0%
Healthcare11.76%0.0%
Consumer Defensive3.82%0.0%
Real Estate8.31%0.0%
Financial Services11.64%0.0%
Consumer Cyclical13.59%0.0%
Basic Materials4.1%0.0%

The iShares Russell Mid-Cap ETF (IWR) has the most exposure to the Technology sector at 19.67%. This is followed by Industrials and Consumer Cyclical at 14.54% and 13.59% respectively. Consumer Defensive (3.82%), Basic Materials (4.1%), and Utilities (4.46%) only make up 12.38% of the fund’s total assets.

IWR’s mid-section with moderate exposure is comprised of Communication Services, Real Estate, Financial Services, Healthcare, and Consumer Cyclical stocks at 4.64%, 8.31%, 11.64%, 11.76%, and 13.59%.

The Energy Select Sector SPDR Fund (XLE) has the most exposure to the Energy 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.

XLE’s mid-section with moderate exposure is comprised of Consumer Defensive, Healthcare, Utilities, Communication Services, and Industrials stocks at 0.0%, 0.0%, 0.0%, 0.0%, and 0.0%.

IWR is 19.67% more exposed to the Technology sector than XLE (19.67% vs 0.0%). IWR’s exposure to Industrials and Consumer Cyclical stocks is 14.54% higher and 13.59% higher respectively (14.54% vs. 0.0% and 13.59% vs. 0.0%). In total, Consumer Defensive, Basic Materials, and Utilities also make up 12.38% more of the fund’s holdings compared to XLE (12.38% vs. 0.00%).

Holdings

IWR - Holdings

IWR HoldingsWeight
IDEXX Laboratories Inc0.51%
DocuSign Inc0.51%
Twitter Inc0.48%
Chipotle Mexican Grill Inc0.47%
Roku Inc Class A0.44%
Marvell Technology Inc0.44%
DexCom Inc0.44%
Trane Technologies PLC0.43%
MSCI Inc0.43%
Carrier Global Corp Ordinary Shares0.43%

IWR’s Top Holdings are IDEXX Laboratories Inc, DocuSign Inc, Twitter Inc, Chipotle Mexican Grill Inc, and Roku Inc Class A at 0.51%, 0.51%, 0.48%, 0.47%, and 0.44%.

Marvell Technology Inc (0.44%), DexCom Inc (0.44%), and Trane Technologies PLC (0.43%) have a slightly smaller but still significant weight. MSCI Inc and Carrier Global Corp Ordinary Shares are also represented in the IWR’s holdings at 0.43% and 0.43%.

XLE - Holdings

XLE HoldingsWeight
Exxon Mobil Corp23.7%
Chevron Corp20.03%
ConocoPhillips4.64%
EOG Resources Inc4.46%
Schlumberger Ltd4.43%
Marathon Petroleum Corp4.17%
Pioneer Natural Resources Co4.08%
Phillips 664.07%
Kinder Morgan Inc Class P3.85%
Williams Companies Inc3.5%

XLE’s Top Holdings are Exxon Mobil Corp, Chevron Corp, ConocoPhillips, EOG Resources Inc, and Schlumberger Ltd at 23.7%, 20.03%, 4.64%, 4.46%, and 4.43%.

Marathon Petroleum Corp (4.17%), Pioneer Natural Resources Co (4.08%), and Phillips 66 (4.07%) have a slightly smaller but still significant weight. Kinder Morgan Inc Class P and Williams Companies Inc are also represented in the XLE’s holdings at 3.85% and 3.5%.

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Risk Analysis

IWRXLE
Mean Return1.170.32
R-squared91.5261.84
Std. Deviation15.6627.52
Alpha-2.8-11.98
Beta1.111.54
Sharpe Ratio0.860.12
Treynor Ratio11.72-0.4

The iShares Russell Mid-Cap ETF (IWR) has a Beta of 1.11 with a Mean Return of 1.17 and a Sharpe Ratio of 0.86. Its R-squared is 91.52 while IWR’s Standard Deviation is 15.66. Furthermore, the fund has a Treynor Ratio of 11.72 and a Alpha of -2.8.

The Energy Select Sector SPDR Fund (XLE) has a Treynor Ratio of -0.4 with a Standard Deviation of 27.52 and a Alpha of -11.98. Its Beta is 1.54 while XLE’s R-squared is 61.84. Furthermore, the fund has a Mean Return of 0.32 and a Sharpe Ratio of 0.12.

IWR’s Mean Return is 0.85 points higher than that of XLE and its R-squared is 29.68 points higher. With a Standard Deviation of 15.66, IWR is slightly less volatile than XLE. The Alpha and Beta of IWR are 9.18 points higher and 0.43 points lower than XLE’s Alpha and Beta.

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Performance

Annual Returns

IWR vs. XLE - Annual Returns

YearIWRXLE
202016.91%-32.56%
201930.31%11.87%
2018-9.13%-18.1%
201718.32%-1.01%
201613.58%27.95%
2015-2.57%-21.47%
201413.03%-8.61%
201334.5%26.16%
201217.13%5.17%
2011-1.67%2.98%
201025.25%21.7%

IWR had its best year in 2013 with an annual return of 34.5%. IWR’s worst year over the past decade yielded -9.13% and occurred in 2018. In most years the iShares Russell Mid-Cap ETF provided moderate returns such as in 2016, 2020, and 2012 where annual returns amounted to 13.58%, 16.91%, and 17.13% respectively.

The year 2016 was the strongest year for XLE, returning 27.95% on an annual basis. The poorest year for XLE in the last ten years was 2020, with a yield of -32.56%. Most years the Energy Select Sector SPDR Fund has given investors modest returns, such as in 2017, 2011, and 2012, when gains were -1.01%, 2.98%, and 5.17% respectively.

Portfolio Growth

IWR vs. XLE - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
IWR$10,000$39,75114.15%
XLE$10,000$9,3391.28%

A $10,000 investment in IWR would have resulted in a final balance of $39,751. This is a profit of $29,751 over 11 years and amounts to a compound annual growth rate (CAGR) of 14.15%.

With a $10,000 investment in XLE, the end total would have been $9,339. This equates to a $-661 profit over 11 years and a compound annual growth rate (CAGR) of 1.28%.

IWR’s CAGR is 12.87 percentage points higher than that of XLE and as a result, would have yielded $30,412 more on a $10,000 investment. Thus, IWR outperformed XLE by 12.87% annually.


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