Skip to content

XLE vs. IVE: What’s The Difference?

The Energy Select Sector SPDR Fund (XLE) and the iShares S&P 500 Value ETF (IVE) are both among the Top 100 ETFs. XLE is a SPDR State Street Global Advisors Equity Energy fund and IVE is a iShares Large Value fund. So, what’s the difference between XLE and IVE? And which fund is better?

The expense ratio of XLE is 0.06 percentage points lower than IVE’s (0.12% vs. 0.18%). XLE also has a higher exposure to the energy sector and a higher standard deviation. Overall, XLE has provided lower returns than IVE over the past 11 years.

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

TIP: Keep track of all your investments with Personal Capital. I use this amazing tool to aggregate all investments in one place and make sure I'm on track to financial freedom. Oh, and did I mention it's free? Try it out here (link to Personal Capital).

Summary

XLEIVE
NameEnergy Select Sector SPDR FundiShares S&P 500 Value ETF
CategoryEquity EnergyLarge Value
IssuerSPDR State Street Global AdvisorsiShares
AUM25.55B22.4B
Avg. Return1.28%11.68%
Div. Yield3.92%1.88%
Expense Ratio0.12%0.18%

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%.

The iShares S&P 500 Value ETF (IVE) is a Large Value fund that is issued by iShares. It currently has 22.4B total assets under management and has yielded an average annual return of 11.68% over the past 10 years. The fund has a dividend yield of 1.88% with an expense ratio of 0.18%.

XLE’s dividend yield is 2.04% higher than that of IVE (3.92% vs. 1.88%). Also, XLE yielded on average 10.40% less per year over the past decade (1.28% vs. 11.68%). The expense ratio of XLE is 0.06 percentage points lower than IVE’s (0.12% vs. 0.18%).

FYI: The best way I've found to invest in ETFs is through M1 Finance. It's free and you even get an instant line of credit! Have a look here (link to M1 Finance).

Fund Composition

Industry Exposure

XLE vs. IVE - Industry Exposure

XLEIVE
Technology0.0%9.41%
Industrials0.0%12.19%
Energy100.0%5.43%
Communication Services0.0%6.4%
Utilities0.0%4.82%
Healthcare0.0%15.4%
Consumer Defensive0.0%9.23%
Real Estate0.0%4.38%
Financial Services0.0%22.06%
Consumer Cyclical0.0%7.68%
Basic Materials0.0%2.99%

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%.

The iShares S&P 500 Value ETF (IVE) has the most exposure to the Financial Services sector at 22.06%. This is followed by Healthcare and Industrials at 15.4% and 12.19% respectively. Real Estate (4.38%), Utilities (4.82%), and Energy (5.43%) only make up 14.63% of the fund’s total assets.

IVE’s mid-section with moderate exposure is comprised of Communication Services, Consumer Cyclical, Consumer Defensive, Technology, and Industrials stocks at 6.4%, 7.68%, 9.23%, 9.41%, and 12.19%.

XLE is 94.57% more exposed to the Energy sector than IVE (100.0% vs 5.43%). XLE’s exposure to Technology and Industrials stocks is 9.41% lower and 12.19% lower respectively (0.0% vs. 9.41% and 0.0% vs. 12.19%). In total, Consumer Cyclical, Financial Services, and Real Estate also make up 34.12% less of the fund’s holdings compared to IVE (0.00% vs. 34.12%).

Holdings

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%.

IVE - Holdings

IVE HoldingsWeight
Berkshire Hathaway Inc Class B3.05%
JPMorgan Chase & Co2.65%
The Walt Disney Co1.85%
Bank of America Corp1.67%
Johnson & Johnson1.57%
Exxon Mobil Corp1.41%
Pfizer Inc1.38%
Cisco Systems Inc1.35%
Verizon Communications Inc1.33%
Intel Corp1.25%

IVE’s Top Holdings are Berkshire Hathaway Inc Class B, JPMorgan Chase & Co, The Walt Disney Co, Bank of America Corp, and Johnson & Johnson at 3.05%, 2.65%, 1.85%, 1.67%, and 1.57%.

Exxon Mobil Corp (1.41%), Pfizer Inc (1.38%), and Cisco Systems Inc (1.35%) have a slightly smaller but still significant weight. Verizon Communications Inc and Intel Corp are also represented in the IVE’s holdings at 1.33% and 1.25%.

NOTE: The easiest way to add diversification to your portfolio is to invest in real estate through Fundrise. You can become private real estate investor without the burden of property management! Check it out here (link to Fundrise).

Risk Analysis

XLEIVE
Mean Return0.321.05
R-squared61.8492.08
Std. Deviation27.5214.3
Alpha-11.98-2.9
Beta1.541.01
Sharpe Ratio0.120.83
Treynor Ratio-0.411.41

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

The iShares S&P 500 Value ETF (IVE) has a Alpha of -2.9 with a Beta of 1.01 and a Mean Return of 1.05. Its Sharpe Ratio is 0.83 while IVE’s Standard Deviation is 14.3. Furthermore, the fund has a Treynor Ratio of 11.41 and a R-squared of 92.08.

XLE’s Mean Return is 0.73 points lower than that of IVE and its R-squared is 30.24 points lower. With a Standard Deviation of 27.52, XLE is slightly more volatile than IVE. The Alpha and Beta of XLE are 9.08 points lower and 0.53 points higher than IVE’s Alpha and Beta.

FYI: Another great way to get exposure to the real estate sector is by investing in real estate debt. Groundfloor offers fantastic short-term, high-yield bonds that can add diversification to your portfolio!

Performance

Annual Returns

XLE vs. IVE - Annual Returns

YearXLEIVE
2020-32.56%1.24%
201911.87%31.71%
2018-18.1%-9.09%
2017-1.01%15.19%
201627.95%17.17%
2015-21.47%-3.24%
2014-8.61%12.14%
201326.16%31.69%
20125.17%17.45%
20112.98%-0.63%
201021.7%14.9%

XLE had its best year in 2016 with an annual return of 27.95%. XLE’s worst year over the past decade yielded -32.56% and occurred in 2020. In most years the Energy Select Sector SPDR Fund provided moderate returns such as in 2017, 2011, and 2012 where annual returns amounted to -1.01%, 2.98%, and 5.17% respectively.

The year 2019 was the strongest year for IVE, returning 31.71% on an annual basis. The poorest year for IVE in the last ten years was 2018, with a yield of -9.09%. Most years the iShares S&P 500 Value ETF has given investors modest returns, such as in 2014, 2010, and 2017, when gains were 12.14%, 14.9%, and 15.19% respectively.

Portfolio Growth

XLE vs. IVE - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
XLE$10,000$9,3391.28%
IVE$10,000$31,35011.68%

A $10,000 investment in XLE would have resulted in a final balance of $9,339. This is a profit of $-661 over 11 years and amounts to a compound annual growth rate (CAGR) of 1.28%.

With a $10,000 investment in IVE, the end total would have been $31,350. This equates to a $21,350 profit over 11 years and a compound annual growth rate (CAGR) of 11.68%.

XLE’s CAGR is 10.40 percentage points lower than that of IVE and as a result, would have yielded $22,011 less on a $10,000 investment. Thus, XLE performed worse than IVE by 10.40% annually.


Current recommendations:

Over the past years, I have discovered several tools and products that have helped me tremendously on my path to financial freedom:

P.S.: The links below are affiliate links, which means I receive a small commission at no extra cost to you when you sign up for one of the services. Thank you for your support!

1)Personal Capital is simply the best tool out there to track your net worth and plan for financial freedom. Just their retirement planner alone has become an invaluable tool to keep myself on track financially. Try it out, it's free!

2) Take a look at M1 Finance, my favorite broker. I love how easy it is to invest and maintain my portfolio with them. I can set up automatic transfers, rebalance my portfolio with one click and even borrow up to 35% of my assets at super low interest rates!

3) Fundrise is by far the best way I've found to invest in Real Estate. You can diversify your portfolio by investing in their eREITs or even allocate capital to individual properties (without the hassle of managing tenants!).

4) Groundfloor is another great way to get exposure to the real estate sector by investing in short-term, high-yield real estate debt. Current returns are >10% and you can get started with just $10.

5) If you are interested in startup investing, check out Mainvest. I've started allocating a small amount of assets to invest in and support small businesses. Return targets are between 10-25% and you can start with just $100!

To see all of my most up-to-date recommendations, check out the Recommended Tools section.

Leave a Reply

Your email address will not be published.