The Energy Select Sector SPDR Fund (XLE) and the JPMorgan Ultra-Short Income ETF (JPST) are both among the Top 100 ETFs. XLE is a SPDR State Street Global Advisors Equity Energy fund and JPST is a JPMorgan Ultrashort Bond fund. So, what’s the difference between XLE and JPST? And which fund is better?
The expense ratio of XLE is 0.06 percentage points lower than JPST’s (0.12% vs. 0.18%). XLE also has a high exposure to the energy sector while JPST is mostly comprised of A bonds. Overall, XLE has provided lower returns than JPST over the past 3 years.
In this article, we’ll compare XLE vs. JPST. We’ll look at annual returns and risk metrics, as well as at their fund composition and portfolio growth. Moreover, I’ll also discuss XLE’s and JPST’s performance, industry exposure, and holdings and examine how these affect their overall returns.
Summary
| XLE | JPST | |
| Name | Energy Select Sector SPDR Fund | JPMorgan Ultra-Short Income ETF |
| Category | Equity Energy | Ultrashort Bond |
| Issuer | SPDR State Street Global Advisors | JPMorgan |
| AUM | 25.55B | 17.32B |
| Avg. Return | 1.28% | 2.57% |
| Div. Yield | 3.92% | 0.94% |
| Expense Ratio | 0.12% | 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 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%.
XLE’s dividend yield is 2.98% higher than that of JPST (3.92% vs. 0.94%). Also, XLE yielded on average 1.29% less per year over the past decade (1.28% vs. 2.57%). The expense ratio of XLE is 0.06 percentage points lower than JPST’s (0.12% vs. 0.18%).
Fund Composition
Holdings
| XLE Holdings | Weight |
| Exxon Mobil Corp | 23.7% |
| Chevron Corp | 20.03% |
| ConocoPhillips | 4.64% |
| EOG Resources Inc | 4.46% |
| Schlumberger Ltd | 4.43% |
| Marathon Petroleum Corp | 4.17% |
| Pioneer Natural Resources Co | 4.08% |
| Phillips 66 | 4.07% |
| Kinder Morgan Inc Class P | 3.85% |
| Williams Companies Inc | 3.5% |
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%.
| 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.
Risk Analysis
| XLE | JPST | |
| Mean Return | 0.32 | 0 |
| R-squared | 61.84 | 0 |
| Std. Deviation | 27.52 | 0 |
| Alpha | -11.98 | 0 |
| Beta | 1.54 | 0 |
| Sharpe Ratio | 0.12 | 0 |
| Treynor Ratio | -0.4 | 0 |
The Energy Select Sector SPDR Fund (XLE) has a Mean Return of 0.32 with a Sharpe Ratio of 0.12 and a R-squared of 61.84. Its Alpha is -11.98 while XLE’s Treynor Ratio is -0.4. Furthermore, the fund has a Standard Deviation of 27.52 and a Beta of 1.54.
The JPMorgan Ultra-Short Income ETF (JPST) has a Treynor Ratio of 0 with a Alpha of 0 and a Sharpe Ratio of 0. Its Mean Return is 0 while JPST’s Standard Deviation is 0. Furthermore, the fund has a Beta of 0 and a R-squared of 0.
XLE’s Mean Return is 0.32 points higher than that of JPST and its R-squared is 61.84 points higher. With a Standard Deviation of 27.52, XLE is slightly more volatile than JPST. The Alpha and Beta of XLE are 11.98 points lower and 1.54 points higher than JPST’s Alpha and Beta.
Performance
Annual Returns
| Year | XLE | JPST |
| 2020 | -32.56% | 2.17% |
| 2019 | 11.87% | 3.36% |
| 2018 | -18.1% | 2.19% |
| 2017 | -1.01% | 0.0% |
| 2016 | 27.95% | 0.0% |
| 2015 | -21.47% | 0.0% |
| 2014 | -8.61% | 0.0% |
| 2013 | 26.16% | 0.0% |
| 2012 | 5.17% | 0.0% |
| 2011 | 2.98% | 0.0% |
| 2010 | 21.7% | 0.0% |
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 JPST, returning 3.36% on an annual basis. The poorest year for JPST in the last ten years was 2017, with a yield of 0.0%. Most years the JPMorgan Ultra-Short Income ETF has given investors modest returns, such as in 2013, 2012, and 2011, when gains were 0.0%, 0.0%, and 0.0% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| XLE | $10,000 | $6,178 | 1.28% |
| JPST | $10,000 | $10,791 | 2.57% |
A $10,000 investment in XLE would have resulted in a final balance of $6,178. This is a profit of $-3,822 over 3 years and amounts to a compound annual growth rate (CAGR) of 1.28%.
With a $10,000 investment in JPST, the end total would have been $10,791. This equates to a $791 profit over 3 years and a compound annual growth rate (CAGR) of 2.57%.
XLE’s CAGR is 1.29 percentage points lower than that of JPST and as a result, would have yielded $4,613 less on a $10,000 investment. Thus, XLE performed worse than JPST by 1.29% annually.
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