XLK vs. IXUS: What’s The Difference?

The Technology Select Sector SPDR Fund (XLK) and the iShares Core MSCI Total International Stock ETF (IXUS) are both among the Top 100 ETFs. XLK is a SPDR State Street Global Advisors Technology fund and IXUS is a iShares Foreign Large Blend fund. So, what’s the difference between XLK and IXUS? And which fund is better?

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

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

Summary

XLK IXUS
Name Technology Select Sector SPDR Fund iShares Core MSCI Total International Stock ETF
Category Technology Foreign Large Blend
Issuer SPDR State Street Global Advisors iShares
AUM 42.3B 29.54B
Avg. Return 20.02% 6.09%
Div. Yield 0.73% 2.13%
Expense Ratio 0.12% 0.09%

The Technology Select Sector SPDR Fund (XLK) is a Technology fund that is issued by SPDR State Street Global Advisors. It currently has 42.3B total assets under management and has yielded an average annual return of 20.02% over the past 10 years. The fund has a dividend yield of 0.73% 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%.

XLK’s dividend yield is 1.40% lower than that of IXUS (0.73% vs. 2.13%). Also, XLK yielded on average 13.94% more per year over the past decade (20.02% vs. 6.09%). The expense ratio of XLK is 0.03 percentage points higher than IXUS’s (0.12% vs. 0.09%).

Fund Composition

Industry Exposure

XLK vs. IXUS - Industry Exposure

XLK IXUS
Technology 87.54% 13.24%
Industrials 1.75% 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 10.71% 17.34%
Consumer Cyclical 0.0% 12.57%
Basic Materials 0.0% 8.5%

The Technology Select Sector SPDR Fund (XLK) has the most exposure to the Technology sector at 87.54%. This is followed by Financial Services and Industrials at 10.71% and 1.75% 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.

XLK’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 1.75%.

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%.

XLK is 74.30% more exposed to the Technology sector than IXUS (87.54% vs 13.24%). XLK’s exposure to Financial Services and Industrials stocks is 6.63% lower and 11.03% lower respectively (10.71% vs. 17.34% and 1.75% 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

XLK - Holdings

XLK Holdings Weight
Apple Inc 21.45%
Microsoft Corp 20.37%
NVIDIA Corp 4.98%
Visa Inc Class A 3.95%
PayPal Holdings Inc 3.42%
Mastercard Inc A 3.19%
Adobe Inc 2.8%
Salesforce.com Inc 2.26%
Intel Corp 2.26%
Cisco Systems Inc 2.23%

XLK’s Top Holdings are Apple Inc, Microsoft Corp, NVIDIA Corp, Visa Inc Class A, and PayPal Holdings Inc at 21.45%, 20.37%, 4.98%, 3.95%, and 3.42%.

Mastercard Inc A (3.19%), Adobe Inc (2.8%), and Salesforce.com Inc (2.26%) have a slightly smaller but still significant weight. Intel Corp and Cisco Systems Inc are also represented in the XLK’s holdings at 2.26% and 2.23%.

IXUS - Holdings

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

XLK IXUS
Mean Return 1.7 0
R-squared 73.56 0
Std. Deviation 15.58 0
Alpha 10.43 0
Beta 0.95 0
Sharpe Ratio 1.27 0
Treynor Ratio 21.44 0

The Technology Select Sector SPDR Fund (XLK) has a Treynor Ratio of 21.44 with a Alpha of 10.43 and a R-squared of 73.56. Its Mean Return is 1.7 while XLK’s Sharpe Ratio is 1.27. Furthermore, the fund has a Beta of 0.95 and a Standard Deviation of 15.58.

The iShares Core MSCI Total International Stock ETF (IXUS) has a Sharpe Ratio of 0 with a R-squared of 0 and a Beta of 0. Its Alpha is 0 while IXUS’s Treynor Ratio is 0. Furthermore, the fund has a Standard Deviation of 0 and a Mean Return of 0.

XLK’s Mean Return is 1.70 points higher than that of IXUS and its R-squared is 73.56 points higher. With a Standard Deviation of 15.58, XLK is slightly more volatile than IXUS. The Alpha and Beta of XLK are 10.43 points higher and 0.95 points higher than IXUS’s Alpha and Beta.

Performance

Annual Returns

XLK vs. IXUS - Annual Returns

Year XLK IXUS
2020 43.67% 11.14%
2019 49.97% 21.85%
2018 -1.56% -14.55%
2017 34.27% 28.08%
2016 14.81% 4.66%
2015 5.62% -4.62%
2014 17.75% -3.96%
2013 25.98% 15.85%
2012 15.47% 0.0%
2011 2.69% 0.0%
2010 11.6% 0.0%

XLK had its best year in 2019 with an annual return of 49.97%. XLK’s worst year over the past decade yielded -1.56% and occurred in 2018. In most years the Technology Select Sector SPDR Fund provided moderate returns such as in 2016, 2012, and 2014 where annual returns amounted to 14.81%, 15.47%, and 17.75% 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

XLK vs. IXUS - Portfolio Growth

Fund Initial Balance Final Balance CAGR
XLK $10,000 $40,663 20.02%
IXUS $10,000 $14,209 6.09%

A $10,000 investment in XLK would have resulted in a final balance of $40,663. This is a profit of $30,663 over 7 years and amounts to a compound annual growth rate (CAGR) of 20.02%.

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%.

XLK’s CAGR is 13.94 percentage points higher than that of IXUS and as a result, would have yielded $26,454 more on a $10,000 investment. Thus, XLK outperformed IXUS by 13.94% annually.


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