JPST vs. XLI: What’s The Difference?

The JPMorgan Ultra-Short Income ETF (JPST) and the Industrial Select Sector SPDR Fund (XLI) are both among the Top 100 ETFs. JPST is a JPMorgan Ultrashort Bond fund and XLI is a SPDR State Street Global Advisors Industrials fund. So, what’s the difference between JPST and XLI? And which fund is better?

The expense ratio of JPST is 0.06 percentage points higher than XLI’s (0.18% vs. 0.12%). JPST is mostly comprised of A bonds while XLI has a high exposure to the industrials sector. Overall, JPST has provided lower returns than XLI over the past 3 years.

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

Summary

JPST XLI
Name JPMorgan Ultra-Short Income ETF Industrial Select Sector SPDR Fund
Category Ultrashort Bond Industrials
Issuer JPMorgan SPDR State Street Global Advisors
AUM 17.32B 19.33B
Avg. Return 2.57% 14.44%
Div. Yield 0.94% 1.25%
Expense Ratio 0.18% 0.12%

The JPMorgan Ultra-Short Income ETF (JPST) is a Ultrashort Bond fund that is issued by JPMorgan. It currently has 17.32B total assets under management and has yielded an average annual return of 2.57% over the past 10 years. The fund has a dividend yield of 0.94% with an expense ratio of 0.18%.

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%.

JPST’s dividend yield is 0.31% lower than that of XLI (0.94% vs. 1.25%). Also, JPST yielded on average 11.87% less per year over the past decade (2.57% vs. 14.44%). The expense ratio of JPST is 0.06 percentage points higher than XLI’s (0.18% vs. 0.12%).

Fund Composition

Holdings

JPST - Holdings

JPST Bond Sectors Weight
A 39.21%
BBB 36.75%
AAA 14.9%
AA 9.14%
Others 0.0%
Below B 0.0%
B 0.0%
BB 0.0%
US Government 0.0%

JPST’s Top Bond Sectors are ratings of A, BBB, AAA, AA, and Others at 39.21%, 36.75%, 14.9%, 9.14%, and 0.0%. The fund is less weighted towards Below B (0.0%), B (0.0%), and BB (0.0%) rated bonds.

XLI - Holdings

XLI Holdings Weight
Honeywell International Inc 4.9%
United Parcel Service Inc Class B 4.84%
Union Pacific Corp 4.7%
Boeing Co 4.24%
Raytheon Technologies Corp 4.16%
Caterpillar Inc 3.84%
General Electric Co 3.8%
3M Co 3.7%
Deere & Co 3.54%
Lockheed Martin Corp 2.98%

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%.

Risk Analysis

JPST XLI
Mean Return 0 1.14
R-squared 0 78.97
Std. Deviation 0 17.13
Alpha 0 2.38
Beta 0 1.08
Sharpe Ratio 0 0.76
Treynor Ratio 0 11.34

The JPMorgan Ultra-Short Income ETF (JPST) has a Treynor Ratio of 0 with a Standard Deviation of 0 and a Alpha of 0. Its R-squared is 0 while JPST’s Mean Return is 0. Furthermore, the fund has a Sharpe Ratio of 0 and a Beta of 0.

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

JPST’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, JPST is slightly less volatile than XLI. The Alpha and Beta of JPST are 2.38 points lower and 1.08 points lower than XLI’s Alpha and Beta.

Performance

Annual Returns

JPST vs. XLI - Annual Returns

Year JPST XLI
2020 2.17% 11.0%
2019 3.36% 29.11%
2018 2.19% -13.1%
2017 0.0% 23.85%
2016 0.0% 19.93%
2015 0.0% -4.27%
2014 0.0% 10.44%
2013 0.0% 40.44%
2012 0.0% 14.86%
2011 0.0% -1.01%
2010 0.0% 27.62%

JPST had its best year in 2019 with an annual return of 3.36%. JPST’s worst year over the past decade yielded 0.0% and occurred in 2017. In most years the JPMorgan Ultra-Short Income ETF provided moderate returns such as in 2013, 2012, and 2011 where annual returns amounted to 0.0%, 0.0%, and 0.0% 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

JPST vs. XLI - Portfolio Growth

Fund Initial Balance Final Balance CAGR
JPST $10,000 $10,791 2.57%
XLI $10,000 $12,453 14.44%

A $10,000 investment in JPST would have resulted in a final balance of $10,791. This is a profit of $791 over 3 years and amounts to a compound annual growth rate (CAGR) of 2.57%.

With a $10,000 investment in XLI, the end total would have been $12,453. This equates to a $2,453 profit over 3 years and a compound annual growth rate (CAGR) of 14.44%.

JPST’s CAGR is 11.87 percentage points lower than that of XLI and as a result, would have yielded $1,662 less on a $10,000 investment. Thus, JPST performed worse than XLI by 11.87% annually.


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