SPY vs XLE
State Street SPDR S&P 500 ETF Trust vs State Street Energy Select Sector SPDR ETF
Quick Verdict
XLE has a lower expense ratio. XLE delivered stronger 1-year returns. SPY offers more diversification with 505 holdings.
Side-by-Side Comparison
| Metric | SPY | XLE | Winner |
|---|---|---|---|
| Expense Ratio | 0.09% | 0.08% | |
| AUM | $814.4B | $40.6B | |
| Dividend Yield | 1.01% | 2.55% | |
| Holdings | 505 | 24 | |
| YTD Return | +12.10% | +43.84% | |
| 1Y Return | +20.30% | +47.57% | |
| 3Y Return (annualized) | +20.82% | +16.12% | |
| 5Y Return (annualized) | +12.53% | +26.65% | |
| Volatility (annualized) | 15.3% | 25.1% | |
| Max Drawdown | -56.5% | -76.7% | |
| Fund Family | State Street Investment Management | SPDR State Street Global Advisors | |
| Category | Equity | Equity | |
| Inception | Jan 22, 1993 | Dec 16, 1998 |
SPY vs XLE Performance
State Street SPDR S&P 500 ETF Trust (SPY) is a ETF from State Street Investment Management and State Street Energy Select Sector SPDR ETF (XLE) is a ETF from SPDR State Street Global Advisors. Over the past year SPY returned +20.30% while XLE returned +47.57%. Year to date, SPY is up 12.10% versus a gain of 43.84% for XLE.
Over three years, SPY compounded at +20.82% per year against +16.12% for XLE; over five years the annualized figures are +12.53% and +26.65% respectively. Across the full 28-year window we track, SPY has the edge at +8.78% annualized vs +7.18%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
XLE has been the more volatile fund, with annualized monthly volatility of 25.1% compared with 15.3% for SPY. Lower volatility generally means a smoother ride, though it often comes with lower long-run returns.
The deepest peak-to-trough decline in our data was -56.5% for SPY and -76.7% for XLE. Drawdown depth is worth weighing if you expect to sell during market stress rather than ride it out.
The two funds' monthly returns correlate at 0.58. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
SPY charges 0.09% per year while XLE charges 0.08%. On a $10,000 position that is $9 vs $8 annually, a gap of $1 per year that compounds over a long holding period. On income, SPY currently yields 1.01% against 2.55% for XLE.
Holdings Overlap
SPY and XLE share 21 holdings out of 505 unique holdings combined, representing a 3.2% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, SPY or XLE?
SPY has an expense ratio of 0.09% while XLE charges 0.08%. XLE is the cheaper option. On a $10,000 investment, that is $1 per year of difference.
Which performed better, SPY or XLE?
Over the past year SPY returned +20.30% vs +47.57% for XLE, so XLE leads on 1-year performance. Over the longest common window we track (28 years), SPY annualized +8.78% vs +7.18% for XLE. Past performance does not guarantee future results.
Which is riskier, SPY or XLE?
XLE has been the more volatile fund at 25.1% annualized versus 15.3% for SPY. Worst drawdown: SPY -56.5% vs XLE -76.7%.
Should I hold both SPY and XLE?
SPY and XLE have a monthly-return correlation of 0.58, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between SPY and XLE?
SPY and XLE share 21 common holdings with a 3.2% weight overlap. Combined, they hold 505 unique securities.
Which pays a higher dividend, SPY or XLE?
SPY yields 1.01% while XLE yields 2.55%, so XLE currently pays the higher dividend yield.
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