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XLY vs. VOE: What’s The Difference?

The Consumer Discretionary Select Sector SPDR Fund (XLY) and the Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) are both among the Top 100 ETFs. XLY is a SPDR State Street Global Advisors Consumer Cyclical fund and VOE is a Vanguard Mid-Cap Value fund. So, what’s the difference between XLY and VOE? And which fund is better?

The expense ratio of XLY is 0.05 percentage points higher than VOE’s (0.12% vs. 0.07%). XLY also has a higher exposure to the consumer cyclical sector and a lower standard deviation. Overall, XLY has provided higher returns than VOE over the past 11 years.

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

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Summary

XLYVOE
NameConsumer Discretionary Select Sector SPDR FundVanguard Mid-Cap Value Index Fund ETF Shares
CategoryConsumer CyclicalMid-Cap Value
IssuerSPDR State Street Global AdvisorsVanguard
AUM20.21B26.78B
Avg. Return18.86%12.52%
Div. Yield0.63%1.87%
Expense Ratio0.12%0.07%

The Consumer Discretionary Select Sector SPDR Fund (XLY) is a Consumer Cyclical fund that is issued by SPDR State Street Global Advisors. It currently has 20.21B total assets under management and has yielded an average annual return of 18.86% over the past 10 years. The fund has a dividend yield of 0.63% with an expense ratio of 0.12%.

The Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) is a Mid-Cap Value fund that is issued by Vanguard. It currently has 26.78B total assets under management and has yielded an average annual return of 12.52% over the past 10 years. The fund has a dividend yield of 1.87% with an expense ratio of 0.07%.

XLY’s dividend yield is 1.24% lower than that of VOE (0.63% vs. 1.87%). Also, XLY yielded on average 6.34% more per year over the past decade (18.86% vs. 12.52%). The expense ratio of XLY is 0.05 percentage points higher than VOE’s (0.12% vs. 0.07%).

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Fund Composition

Industry Exposure

XLY vs. VOE - Industry Exposure

XLYVOE
Technology0.57%9.85%
Industrials0.0%9.4%
Energy0.0%5.69%
Communication Services0.0%5.27%
Utilities0.0%10.93%
Healthcare0.0%7.04%
Consumer Defensive5.34%4.85%
Real Estate0.0%11.48%
Financial Services0.0%18.26%
Consumer Cyclical94.1%11.8%
Basic Materials0.0%5.44%

The Consumer Discretionary Select Sector SPDR Fund (XLY) has the most exposure to the Consumer Cyclical sector at 94.1%. This is followed by Consumer Defensive and Technology at 5.34% and 0.57% respectively. Financial Services (0.0%), Real Estate (0.0%), and Healthcare (0.0%) only make up 0.00% of the fund’s total assets.

XLY’s mid-section with moderate exposure is comprised of Utilities, Communication Services, Energy, Industrials, and Technology stocks at 0.0%, 0.0%, 0.0%, 0.0%, and 0.57%.

The Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) has the most exposure to the Financial Services sector at 18.26%. This is followed by Consumer Cyclical and Real Estate at 11.8% and 11.48% respectively. Communication Services (5.27%), Basic Materials (5.44%), and Energy (5.69%) only make up 16.40% of the fund’s total assets.

VOE’s mid-section with moderate exposure is comprised of Healthcare, Industrials, Technology, Utilities, and Real Estate stocks at 7.04%, 9.4%, 9.85%, 10.93%, and 11.48%.

XLY is 82.30% more exposed to the Consumer Cyclical sector than VOE (94.1% vs 11.8%). XLY’s exposure to Consumer Defensive and Technology stocks is 0.49% higher and 9.28% lower respectively (5.34% vs. 4.85% and 0.57% vs. 9.85%). In total, Financial Services, Real Estate, and Healthcare also make up 36.78% less of the fund’s holdings compared to VOE (0.00% vs. 36.78%).

Holdings

XLY - Holdings

XLY HoldingsWeight
Amazon.com Inc22.9%
Tesla Inc13.5%
The Home Depot Inc8.74%
McDonald’s Corp4.5%
Nike Inc B4.45%
Lowe’s Companies Inc3.58%
Starbucks Corp3.44%
Target Corp3.12%
Booking Holdings Inc2.35%
TJX Companies Inc2.12%

XLY’s Top Holdings are Amazon.com Inc, Tesla Inc, The Home Depot Inc, McDonald’s Corp, and Nike Inc B at 22.9%, 13.5%, 8.74%, 4.5%, and 4.45%.

Lowe’s Companies Inc (3.58%), Starbucks Corp (3.44%), and Target Corp (3.12%) have a slightly smaller but still significant weight. Booking Holdings Inc and TJX Companies Inc are also represented in the XLY’s holdings at 2.35% and 2.12%.

VOE - Holdings

VOE HoldingsWeight
Carrier Global Corp Ordinary Shares1.28%
International Flavors & Fragrances Inc1.13%
Motorola Solutions Inc1.12%
Discover Financial Services1.09%
Welltower Inc1.05%
Corteva Inc0.99%
Valero Energy Corp0.97%
Corning Inc0.95%
Willis Towers Watson PLC0.9%
D.R. Horton Inc0.89%

VOE’s Top Holdings are Carrier Global Corp Ordinary Shares, International Flavors & Fragrances Inc, Motorola Solutions Inc, Discover Financial Services, and Welltower Inc at 1.28%, 1.13%, 1.12%, 1.09%, and 1.05%.

Corteva Inc (0.99%), Valero Energy Corp (0.97%), and Corning Inc (0.95%) have a slightly smaller but still significant weight. Willis Towers Watson PLC and D.R. Horton Inc are also represented in the VOE’s holdings at 0.9% and 0.89%.

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Risk Analysis

XLYVOE
Mean Return1.471.05
R-squared80.8488.76
Std. Deviation15.9715.98
Alpha6.96-3.77
Beta1.021.11
Sharpe Ratio1.060.75
Treynor Ratio16.6910.19

The Consumer Discretionary Select Sector SPDR Fund (XLY) has a Beta of 1.02 with a Mean Return of 1.47 and a Treynor Ratio of 16.69. Its R-squared is 80.84 while XLY’s Sharpe Ratio is 1.06. Furthermore, the fund has a Alpha of 6.96 and a Standard Deviation of 15.97.

The Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) has a Treynor Ratio of 10.19 with a Mean Return of 1.05 and a Alpha of -3.77. Its Sharpe Ratio is 0.75 while VOE’s R-squared is 88.76. Furthermore, the fund has a Beta of 1.11 and a Standard Deviation of 15.98.

XLY’s Mean Return is 0.42 points higher than that of VOE and its R-squared is 7.92 points lower. With a Standard Deviation of 15.97, XLY is slightly less volatile than VOE. The Alpha and Beta of XLY are 10.73 points higher and 0.09 points lower than VOE’s Alpha and Beta.

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Performance

Annual Returns

XLY vs. VOE - Annual Returns

YearXLYVOE
202029.66%2.5%
201928.43%27.98%
20181.66%-12.41%
201722.77%17.05%
20165.87%15.26%
20159.93%-1.8%
20149.49%13.98%
201342.74%37.65%
201223.6%16.04%
20115.98%-0.32%
201027.36%21.83%

XLY had its best year in 2013 with an annual return of 42.74%. XLY’s worst year over the past decade yielded 1.66% and occurred in 2018. In most years the Consumer Discretionary Select Sector SPDR Fund provided moderate returns such as in 2015, 2017, and 2012 where annual returns amounted to 9.93%, 22.77%, and 23.6% respectively.

The year 2013 was the strongest year for VOE, returning 37.65% on an annual basis. The poorest year for VOE in the last ten years was 2018, with a yield of -12.41%. Most years the Vanguard Mid-Cap Value Index Fund ETF Shares has given investors modest returns, such as in 2014, 2016, and 2012, when gains were 13.98%, 15.26%, and 16.04% respectively.

Portfolio Growth

XLY vs. VOE - Portfolio Growth

FundInitial BalanceFinal BalanceCAGR
XLY$10,000$63,06618.86%
VOE$10,000$33,65512.52%

A $10,000 investment in XLY would have resulted in a final balance of $63,066. This is a profit of $53,066 over 11 years and amounts to a compound annual growth rate (CAGR) of 18.86%.

With a $10,000 investment in VOE, the end total would have been $33,655. This equates to a $23,655 profit over 11 years and a compound annual growth rate (CAGR) of 12.52%.

XLY’s CAGR is 6.34 percentage points higher than that of VOE and as a result, would have yielded $29,411 more on a $10,000 investment. Thus, XLY outperformed VOE by 6.34% annually.


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