IXUS vs. XLY: What’s The Difference?

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

The expense ratio of IXUS is 0.03 percentage points lower than XLY’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 XLY over the past ten years.

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

Summary

IXUS XLY
Name iShares Core MSCI Total International Stock ETF Consumer Discretionary Select Sector SPDR Fund
Category Foreign Large Blend Consumer Cyclical
Issuer iShares SPDR State Street Global Advisors
AUM 29.54B 20.21B
Avg. Return 6.09% 18.86%
Div. Yield 2.13% 0.63%
Expense Ratio 0.09% 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 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%.

IXUS’s dividend yield is 1.50% higher than that of XLY (2.13% vs. 0.63%). Also, IXUS yielded on average 12.78% less per year over the past decade (6.09% vs. 18.86%). The expense ratio of IXUS is 0.03 percentage points lower than XLY’s (0.09% vs. 0.12%).

Fund Composition

Industry Exposure

IXUS vs. XLY - Industry Exposure

IXUS XLY
Technology 13.24% 0.57%
Industrials 12.78% 0.0%
Energy 4.39% 0.0%
Communication Services 7.09% 0.0%
Utilities 2.95% 0.0%
Healthcare 9.29% 0.0%
Consumer Defensive 8.19% 5.34%
Real Estate 3.66% 0.0%
Financial Services 17.34% 0.0%
Consumer Cyclical 12.57% 94.1%
Basic Materials 8.5% 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 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%.

IXUS is 17.34% more exposed to the Financial Services sector than XLY (17.34% vs 0.0%). IXUS’s exposure to Technology and Industrials stocks is 12.67% higher and 12.78% higher respectively (13.24% vs. 0.57% and 12.78% vs. 0.0%). In total, Real Estate, Energy, and Communication Services also make up 15.14% more of the fund’s holdings compared to XLY (15.14% vs. 0.00%).

Holdings

IXUS - Holdings

IXUS Holdings Weight
Taiwan Semiconductor Manufacturing Co Ltd 1.64%
Tencent Holdings Ltd 1.35%
Alibaba Group Holding Ltd Ordinary Shares 1.34%
Nestle SA 1.1%
Samsung Electronics Co Ltd 1.06%
ASML Holding NV 0.9%
Roche Holding AG 0.81%
LVMH Moet Hennessy Louis Vuitton SE 0.67%
Novartis AG 0.62%
Toyota Motor Corp 0.59%

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%.

XLY - Holdings

XLY Holdings Weight
Amazon.com Inc 22.9%
Tesla Inc 13.5%
The Home Depot Inc 8.74%
McDonald’s Corp 4.5%
Nike Inc B 4.45%
Lowe’s Companies Inc 3.58%
Starbucks Corp 3.44%
Target Corp 3.12%
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%.

Risk Analysis

IXUS XLY
Mean Return 0 1.47
R-squared 0 80.84
Std. Deviation 0 15.97
Alpha 0 6.96
Beta 0 1.02
Sharpe Ratio 0 1.06
Treynor Ratio 0 16.69

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

The Consumer Discretionary Select Sector SPDR Fund (XLY) has a Mean Return of 1.47 with a Beta of 1.02 and a Treynor Ratio of 16.69. Its Standard Deviation is 15.97 while XLY’s Alpha is 6.96. Furthermore, the fund has a Sharpe Ratio of 1.06 and a R-squared of 80.84.

IXUS’s Mean Return is 1.47 points lower than that of XLY and its R-squared is 80.84 points lower. With a Standard Deviation of 0, IXUS is slightly less volatile than XLY. The Alpha and Beta of IXUS are 6.96 points lower and 1.02 points lower than XLY’s Alpha and Beta.

Performance

Annual Returns

IXUS vs. XLY - Annual Returns

Year IXUS XLY
2020 11.14% 29.66%
2019 21.85% 28.43%
2018 -14.55% 1.66%
2017 28.08% 22.77%
2016 4.66% 5.87%
2015 -4.62% 9.93%
2014 -3.96% 9.49%
2013 15.85% 42.74%
2012 0.0% 23.6%
2011 0.0% 5.98%
2010 0.0% 27.36%

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 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.

Portfolio Growth

IXUS vs. XLY - Portfolio Growth

Fund Initial Balance Final Balance CAGR
IXUS $10,000 $14,209 6.09%
XLY $10,000 $26,483 18.86%

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 XLY, the end total would have been $26,483. This equates to a $16,483 profit over 7 years and a compound annual growth rate (CAGR) of 18.86%.

IXUS’s CAGR is 12.78 percentage points lower than that of XLY and as a result, would have yielded $12,274 less on a $10,000 investment. Thus, IXUS performed worse than XLY by 12.78% annually.


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