The SPDR S&P 500 ETF Trust (SPY) and the Communication Services Select Sector SPDR Fund (XLC) are both among the Top 100 ETFs.
SPY is a SPDR State Street Global Advisors Large Blend fund and XLC is a SPDR State Street Global Advisors Communications fund.
So, what’s the difference between SPY and XLC? And which fund is better?

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

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

Summary

Fund Summary
SPYXLC
NameSPDR S&P 500 ETF TrustCommunication Services Select Sector SPDR Fund
CategoryLarge BlendCommunications
IssuerSPDR State Street Global AdvisorsSPDR State Street Global Advisors
AUM374.03B14.09B
Avg. Return14.71%0.0%
Div. Yield1.3%0.62%
Expense Ratio0.09%0.12%

The SPDR S&P 500 ETF Trust (SPY) is a Large Blend fund that is issued by SPDR State Street Global Advisors.
It currently has 374.03B total assets under management and has yielded an average annual return of 14.71% over the past 10 years.
The fund has a dividend yield of 1.3% with an expense ratio of 0.09%.

The Communication Services Select Sector SPDR Fund (XLC) is a Communications fund that is issued by SPDR State Street Global Advisors.
It currently has 14.09B total assets under management and has yielded an average annual return of 0.0% over the past 10 years.
The fund has a dividend yield of 0.62% with an expense ratio of 0.12%.

SPY’s dividend yield is 0.68% higher than that of XLC (1.3% vs. 0.62%).
Also, SPY yielded on average 14.71% more per year over the past decade (14.71% vs. 0.0%).
The expense ratio of SPY is 0.03 percentage points lower than XLC’s (0.09% vs. 0.12%).

Fund Composition

Industry Exposure

SPY vs. XLC - Industry Exposure

SPYXLC
Technology24.22%0.0%
Industrials8.86%0.0%
Energy2.86%0.0%
Communication Services11.14%100.0%
Utilities2.45%0.0%
Healthcare13.09%0.0%
Consumer Defensive6.32%0.0%
Real Estate2.57%0.0%
Financial Services14.23%0.0%
Consumer Cyclical12.0%0.0%
Basic Materials2.27%0.0%

The SPDR S&P 500 ETF Trust (SPY) has the most exposure to the Technology sector at 24.22%.
This is followed by Financial Services and Healthcare at 14.23% and 13.09% respectively.
Utilities (2.45%), Real Estate (2.57%), and Energy (2.86%) only make up 7.88% of the fund’s total assets.

SPY’s mid-section with moderate exposure is comprised of Consumer Defensive, Industrials, Communication Services, Consumer Cyclical, and Healthcare stocks at 6.32%, 8.86%, 11.14%, 12.0%, and 13.09%.

The Communication Services Select Sector SPDR Fund (XLC) has the most exposure to the Communication Services 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.

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

SPY is 24.22% more exposed to the Technology sector than XLC (24.22% vs 0.0%).
SPY’s exposure to Financial Services and Healthcare stocks is 14.23% higher and 13.09% higher respectively (14.23% vs. 0.0% and 13.09% vs. 0.0%).
In total, Utilities, Real Estate, and Energy also make up 7.88% more of the fund’s holdings compared to XLC (7.88%% vs. 0.0%).

Holdings

SPY - Holdings

SPY HoldingsWeight
Apple Inc5.9%
Microsoft Corp5.6%
Amazon.com Inc4.05%
Facebook Inc A2.29%
Alphabet Inc A2.02%
Alphabet Inc Class C1.96%
Berkshire Hathaway Inc Class B1.45%
Tesla Inc1.44%
NVIDIA Corp1.37%
JPMorgan Chase & Co1.29%

SPY’s Top Holdings are Apple Inc, Microsoft Corp, Amazon.com Inc, Facebook Inc A, and Alphabet Inc A at 5.9%, 5.6%, 4.05%, 2.29%, and 2.02%.

Alphabet Inc Class C (1.96%), Berkshire Hathaway Inc Class B (1.45%), and Tesla Inc (1.44%) have a slightly smaller but still significant weight.
NVIDIA Corp and JPMorgan Chase & Co are also represented in the SPY’s holdings at 1.37% and 1.29%.

XLC - Holdings

XLC HoldingsWeight
Facebook Inc A23.75%
Alphabet Inc A11.49%
Alphabet Inc Class C11.16%
Netflix Inc4.78%
Charter Communications Inc A4.65%
Comcast Corp Class A4.44%
T-Mobile US Inc4.41%
The Walt Disney Co4.39%
AT&T Inc4.35%
Verizon Communications Inc4.33%

XLC’s Top Holdings are Facebook Inc A, Alphabet Inc A, Alphabet Inc Class C, Netflix Inc, and Charter Communications Inc A at 23.75%, 11.49%, 11.16%, 4.78%, and 4.65%.

Comcast Corp Class A (4.44%), T-Mobile US Inc (4.41%), and The Walt Disney Co (4.39%) have a slightly smaller but still significant weight.
AT&T Inc and Verizon Communications Inc are also represented in the XLC’s holdings at 4.35% and 4.33%.

Risk Analysis

SPYXLC
Mean Return1.230
R-squared1000
Std. Deviation13.560
Alpha-0.090
Beta10
Sharpe Ratio1.040
Treynor Ratio14.120

The SPDR S&P 500 ETF Trust (SPY) has a Beta of 1 with a Treynor Ratio of 14.12 and a Standard Deviation of 13.56.
Its R-squared is 100 while SPY’s Alpha is -0.09.
Furthermore, the fund has a Mean Return of 1.23 and a Sharpe Ratio of 1.04.

The Communication Services Select Sector SPDR Fund (XLC) has a Standard Deviation of 0 with a Mean Return of 0 and a Sharpe Ratio of 0.
Its Beta is 0 while XLC’s Treynor Ratio is 0.
Furthermore, the fund has a R-squared of 0 and a Alpha of 0.

SPY’s Mean Return is 1.23 points higher than that of XLC and its R-squared is 100.00 points higher.
With a Standard Deviation of 13.56, SPY is slightly more volatile than XLC.
The Alpha and Beta of SPY are 0.09 points lower and 1.00 points higher than XLC’s Alpha and Beta.

Performance

Annual Returns

SPY vs. XLC - Annual Returns

YearSPYXLC
202018.25%26.85%
201931.29%31.22%
2018-4.45%0.0%
201721.69%0.0%
201611.8%0.0%
20151.34%0.0%
201413.53%0.0%
201332.21%0.0%
201215.84%0.0%
20112.06%0.0%
201014.93%0.0%

SPY had its best year in 2013 with an annual return of 32.21%.
SPY’s worst year over the past decade yielded -4.45% and occurred in 2018.
In most years the SPDR S&P 500 ETF Trust provided moderate returns such as in 2014, 2010, and 2012 where annual returns amounted to 13.53%, 14.93%, and 15.84% respectively.

The year 2019 was the strongest year for XLC, returning 31.22% on an annual basis.
The poorest year for XLC in the last ten years was 2018, with a yield of 0.0%.
Most years the Communication Services Select Sector SPDR Fund has given investors modest returns, such as in 2014, 2013, and 2012, when gains were 0.0%, 0.0%, and 0.0% respectively.

Portfolio Growth

SPY vs. XLC - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
SPY$10,000$41,71214.41%
XLC$10,000$16,6455.28%

A $10,000 investment in SPY would have resulted in a final balance of $41,712.
This is a profit of $31,712 over 10 years and amounts to a compound annual growth rate (CAGR) of 14.71%.

With a $10,000 investment in XLC, the end total would have been $16,645.
This equates to a $6,645 profit over ten years and a compound annual growth rate (CAGR) of 0.00%.

SPY’s CAGR is 9.13 percentage points higher than that of XLC and as a result, would have yielded $25,067 more on a $10,000 investment.
Thus, SPY outperformed XLC by 9.13%.

Similar Posts

Leave a Reply

Your email address will not be published. Required fields are marked *