The Financial Select Sector SPDR Fund (XLF) and the iShares Core MSCI Total International Stock ETF (IXUS) are both among the Top 100 ETFs. XLF is a SPDR State Street Global Advisors Financial fund and IXUS is a iShares Foreign Large Blend fund. So, what’s the difference between XLF and IXUS? And which fund is better?
The expense ratio of XLF is 0.03 percentage points higher than IXUS’s (0.12% vs. 0.09%). XLF also has a higher exposure to the financial services sector and a higher standard deviation. Overall, XLF has provided higher returns than IXUS over the past ten years.
In this article, we’ll compare XLF vs. IXUS. We’ll look at annual returns and fund composition, as well as at their risk metrics and holdings. Moreover, I’ll also discuss XLF’s and IXUS’s portfolio growth, performance, and industry exposure and examine how these affect their overall returns.
Summary
| XLF | IXUS | |
| Name | Financial Select Sector SPDR Fund | iShares Core MSCI Total International Stock ETF |
| Category | Financial | Foreign Large Blend |
| Issuer | SPDR State Street Global Advisors | iShares |
| AUM | 40.81B | 29.54B |
| Avg. Return | 12.17% | 6.09% |
| Div. Yield | 1.57% | 2.13% |
| Expense Ratio | 0.12% | 0.09% |
The Financial Select Sector SPDR Fund (XLF) is a Financial fund that is issued by SPDR State Street Global Advisors. It currently has 40.81B total assets under management and has yielded an average annual return of 12.17% over the past 10 years. The fund has a dividend yield of 1.57% with an expense ratio of 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%.
XLF’s dividend yield is 0.56% lower than that of IXUS (1.57% vs. 2.13%). Also, XLF yielded on average 6.08% more per year over the past decade (12.17% vs. 6.09%). The expense ratio of XLF is 0.03 percentage points higher than IXUS’s (0.12% vs. 0.09%).
Fund Composition
Industry Exposure
| XLF | IXUS | |
| Technology | 0.0% | 13.24% |
| Industrials | 0.0% | 12.78% |
| Energy | 0.0% | 4.39% |
| Communication Services | 0.0% | 7.09% |
| Utilities | 0.0% | 2.95% |
| Healthcare | 0.0% | 9.29% |
| Consumer Defensive | 0.0% | 8.19% |
| Real Estate | 0.0% | 3.66% |
| Financial Services | 100.0% | 17.34% |
| Consumer Cyclical | 0.0% | 12.57% |
| Basic Materials | 0.0% | 8.5% |
The Financial Select Sector SPDR Fund (XLF) has the most exposure to the Financial Services sector at 100.0%. This is followed by Technology and Industrials at 0.0% and 0.0% respectively. Consumer Cyclical (0.0%), Real Estate (0.0%), and Consumer Defensive (0.0%) only make up 0.00% of the fund’s total assets.
XLF’s mid-section with moderate exposure is comprised of Healthcare, Utilities, Communication Services, Energy, and Industrials stocks at 0.0%, 0.0%, 0.0%, 0.0%, and 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%.
XLF is 82.66% more exposed to the Financial Services sector than IXUS (100.0% vs 17.34%). XLF’s exposure to Technology and Industrials stocks is 13.24% lower and 12.78% lower respectively (0.0% vs. 13.24% and 0.0% vs. 12.78%). In total, Consumer Cyclical, Real Estate, and Consumer Defensive also make up 24.42% less of the fund’s holdings compared to IXUS (0.00% vs. 24.42%).
Holdings
| XLF Holdings | Weight |
| Berkshire Hathaway Inc Class B | 12.83% |
| JPMorgan Chase & Co | 11.47% |
| Bank of America Corp | 7.57% |
| Wells Fargo & Co | 4.56% |
| Citigroup Inc | 3.56% |
| Morgan Stanley | 3.32% |
| Goldman Sachs Group Inc | 3.15% |
| BlackRock Inc | 3.02% |
| Charles Schwab Corp | 2.66% |
| American Express Co | 2.62% |
XLF’s Top Holdings are Berkshire Hathaway Inc Class B, JPMorgan Chase & Co, Bank of America Corp, Wells Fargo & Co, and Citigroup Inc at 12.83%, 11.47%, 7.57%, 4.56%, and 3.56%.
Morgan Stanley (3.32%), Goldman Sachs Group Inc (3.15%), and BlackRock Inc (3.02%) have a slightly smaller but still significant weight. Charles Schwab Corp and American Express Co are also represented in the XLF’s holdings at 2.66% and 2.62%.
| 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%.
Risk Analysis
| XLF | IXUS | |
| Mean Return | 1.21 | 0 |
| R-squared | 73.26 | 0 |
| Std. Deviation | 18.86 | 0 |
| Alpha | 2.63 | 0 |
| Beta | 1.15 | 0 |
| Sharpe Ratio | 0.74 | 0 |
| Treynor Ratio | 11.25 | 0 |
The Financial Select Sector SPDR Fund (XLF) has a Beta of 1.15 with a Sharpe Ratio of 0.74 and a Mean Return of 1.21. Its Standard Deviation is 18.86 while XLF’s Treynor Ratio is 11.25. Furthermore, the fund has a Alpha of 2.63 and a R-squared of 73.26.
The iShares Core MSCI Total International Stock ETF (IXUS) has a Sharpe Ratio of 0 with a Standard Deviation of 0 and a Beta of 0. Its Treynor Ratio is 0 while IXUS’s Mean Return is 0. Furthermore, the fund has a R-squared of 0 and a Alpha of 0.
XLF’s Mean Return is 1.21 points higher than that of IXUS and its R-squared is 73.26 points higher. With a Standard Deviation of 18.86, XLF is slightly more volatile than IXUS. The Alpha and Beta of XLF are 2.63 points higher and 1.15 points higher than IXUS’s Alpha and Beta.
Performance
Annual Returns
| Year | XLF | IXUS |
| 2020 | -1.68% | 11.14% |
| 2019 | 31.88% | 21.85% |
| 2018 | -13.09% | -14.55% |
| 2017 | 22.03% | 28.08% |
| 2016 | 22.55% | 4.66% |
| 2015 | -1.6% | -4.62% |
| 2014 | 15.02% | -3.96% |
| 2013 | 35.37% | 15.85% |
| 2012 | 28.53% | 0.0% |
| 2011 | -17.16% | 0.0% |
| 2010 | 11.97% | 0.0% |
XLF had its best year in 2013 with an annual return of 35.37%. XLF’s worst year over the past decade yielded -17.16% and occurred in 2011. In most years the Financial Select Sector SPDR Fund provided moderate returns such as in 2010, 2014, and 2017 where annual returns amounted to 11.97%, 15.02%, and 22.03% respectively.
The year 2017 was the strongest year for IXUS, returning 28.08% on an annual basis. The poorest year for IXUS in the last ten years was 2018, with a yield of -14.55%. Most years the iShares Core MSCI Total International Stock ETF has given investors modest returns, such as in 2011, 2010, and 2016, when gains were 0.0%, 0.0%, and 4.66% respectively.
Portfolio Growth
| Fund | Initial Balance | Final Balance | CAGR |
| XLF | $10,000 | $19,073 | 12.17% |
| IXUS | $10,000 | $14,209 | 6.09% |
A $10,000 investment in XLF would have resulted in a final balance of $19,073. This is a profit of $9,073 over 7 years and amounts to a compound annual growth rate (CAGR) of 12.17%.
With a $10,000 investment in IXUS, the end total would have been $14,209. This equates to a $4,209 profit over 7 years and a compound annual growth rate (CAGR) of 6.09%.
XLF’s CAGR is 6.08 percentage points higher than that of IXUS and as a result, would have yielded $4,864 more on a $10,000 investment. Thus, XLF outperformed IXUS by 6.08% annually.
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