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IXUS vs. XLI: What’s The Difference?

The iShares Core MSCI Total International Stock ETF (IXUS) and the Industrial Select Sector SPDR Fund (XLI) are both among the Top 100 ETFs. IXUS is a iShares Foreign Large Blend fund and XLI is a SPDR State Street Global Advisors Industrials fund. So, what’s the difference between IXUS and XLI? And which fund is better?

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

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

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Summary

IXUSXLI
NameiShares Core MSCI Total International Stock ETFIndustrial Select Sector SPDR Fund
CategoryForeign Large BlendIndustrials
IssueriSharesSPDR State Street Global Advisors
AUM29.54B19.33B
Avg. Return6.09%14.44%
Div. Yield2.13%1.25%
Expense Ratio0.09%0.12%

The iShares Core MSCI Total International Stock ETF (IXUS) is a Foreign Large Blend fund that is issued by iShares. It currently has 29.54B total assets under management and has yielded an average annual return of 6.09% over the past 10 years. The fund has a dividend yield of 2.13% with an expense ratio of 0.09%.

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%.

IXUS’s dividend yield is 0.88% higher than that of XLI (2.13% vs. 1.25%). Also, IXUS yielded on average 8.36% less per year over the past decade (6.09% vs. 14.44%). The expense ratio of IXUS is 0.03 percentage points lower than XLI’s (0.09% vs. 0.12%).

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Fund Composition

Industry Exposure

IXUS vs. XLI - Industry Exposure

IXUSXLI
Technology13.24%1.82%
Industrials12.78%97.49%
Energy4.39%0.0%
Communication Services7.09%0.0%
Utilities2.95%0.0%
Healthcare9.29%0.0%
Consumer Defensive8.19%0.0%
Real Estate3.66%0.0%
Financial Services17.34%0.0%
Consumer Cyclical12.57%0.69%
Basic Materials8.5%0.0%

The iShares Core MSCI Total International Stock ETF (IXUS) has the most exposure to the Financial Services sector at 17.34%. This is followed by Technology and Industrials at 13.24% and 12.78% respectively. Real Estate (3.66%), Energy (4.39%), and Communication Services (7.09%) only make up 15.14% of the fund’s total assets.

IXUS’s mid-section with moderate exposure is comprised of Consumer Defensive, Basic Materials, Healthcare, Consumer Cyclical, and Industrials stocks at 8.19%, 8.5%, 9.29%, 12.57%, and 12.78%.

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%.

IXUS is 17.34% more exposed to the Financial Services sector than XLI (17.34% vs 0.0%). IXUS’s exposure to Technology and Industrials stocks is 11.42% higher and 84.71% lower respectively (13.24% vs. 1.82% and 12.78% vs. 97.49%). In total, Real Estate, Energy, and Communication Services also make up 15.14% more of the fund’s holdings compared to XLI (15.14% vs. 0.00%).

Holdings

IXUS - Holdings

IXUS HoldingsWeight
Taiwan Semiconductor Manufacturing Co Ltd1.64%
Tencent Holdings Ltd1.35%
Alibaba Group Holding Ltd Ordinary Shares1.34%
Nestle SA1.1%
Samsung Electronics Co Ltd1.06%
ASML Holding NV0.9%
Roche Holding AG0.81%
LVMH Moet Hennessy Louis Vuitton SE0.67%
Novartis AG0.62%
Toyota Motor Corp0.59%

IXUS’s Top Holdings are Taiwan Semiconductor Manufacturing Co Ltd, Tencent Holdings Ltd, Alibaba Group Holding Ltd Ordinary Shares, Nestle SA, and Samsung Electronics Co Ltd at 1.64%, 1.35%, 1.34%, 1.1%, and 1.06%.

ASML Holding NV (0.9%), Roche Holding AG (0.81%), and LVMH Moet Hennessy Louis Vuitton SE (0.67%) have a slightly smaller but still significant weight. Novartis AG and Toyota Motor Corp are also represented in the IXUS’s holdings at 0.62% and 0.59%.

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%.

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Risk Analysis

IXUSXLI
Mean Return01.14
R-squared078.97
Std. Deviation017.13
Alpha02.38
Beta01.08
Sharpe Ratio00.76
Treynor Ratio011.34

The iShares Core MSCI Total International Stock ETF (IXUS) has a Standard Deviation of 0 with a Beta of 0 and a Treynor Ratio of 0. Its Alpha is 0 while IXUS’s Mean Return is 0. Furthermore, the fund has a R-squared of 0 and a Sharpe Ratio of 0.

The Industrial Select Sector SPDR Fund (XLI) has a Sharpe Ratio of 0.76 with a R-squared of 78.97 and a Treynor Ratio of 11.34. Its Beta is 1.08 while XLI’s Mean Return is 1.14. Furthermore, the fund has a Alpha of 2.38 and a Standard Deviation of 17.13.

IXUS’s Mean Return is 1.14 points lower than that of XLI and its R-squared is 78.97 points lower. With a Standard Deviation of 0, IXUS is slightly less volatile than XLI. The Alpha and Beta of IXUS are 2.38 points lower and 1.08 points lower than XLI’s Alpha and Beta.

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Performance

Annual Returns

IXUS vs. XLI - Annual Returns

YearIXUSXLI
202011.14%11.0%
201921.85%29.11%
2018-14.55%-13.1%
201728.08%23.85%
20164.66%19.93%
2015-4.62%-4.27%
2014-3.96%10.44%
201315.85%40.44%
20120.0%14.86%
20110.0%-1.01%
20100.0%27.62%

IXUS had its best year in 2017 with an annual return of 28.08%. IXUS’s worst year over the past decade yielded -14.55% and occurred in 2018. In most years the iShares Core MSCI Total International Stock ETF provided moderate returns such as in 2011, 2010, and 2016 where annual returns amounted to 0.0%, 0.0%, and 4.66% 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

IXUS vs. XLI - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
IXUS$10,000$14,2096.09%
XLI$10,000$19,55614.44%

A $10,000 investment in IXUS would have resulted in a final balance of $14,209. This is a profit of $4,209 over 7 years and amounts to a compound annual growth rate (CAGR) of 6.09%.

With a $10,000 investment in XLI, the end total would have been $19,556. This equates to a $9,556 profit over 7 years and a compound annual growth rate (CAGR) of 14.44%.

IXUS’s CAGR is 8.36 percentage points lower than that of XLI and as a result, would have yielded $5,347 less on a $10,000 investment. Thus, IXUS performed worse than XLI by 8.36% annually.


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