SPY vs XLP
State Street SPDR S&P 500 ETF Trust vs State Street Consumer Staples Select Sector SPDR ETF
Quick Verdict
XLP has a lower expense ratio. SPY delivered stronger 1-year returns. SPY offers more diversification with 503 holdings.
Side-by-Side Comparison
| Metric | SPY | XLP | Winner |
|---|---|---|---|
| Expense Ratio | 0.09% | 0.08% | |
| AUM | $789.1B | $14.5B | |
| Dividend Yield | 1.01% | 2.64% | |
| Holdings | 505 | 39 | |
| YTD Return | +13.39% | +10.38% | |
| 1Y Return | +22.52% | +5.62% | |
| 3Y Return (annualized) | +21.36% | +7.29% | |
| 5Y Return (annualized) | +13.19% | +6.08% | |
| Volatility (annualized) | 15.3% | 12.5% | |
| Max Drawdown | -56.5% | -37.8% | |
| Fund Family | State Street Investment Management | SPDR State Street Global Advisors | |
| Category | Equity | Equity | |
| Inception | Jan 22, 1993 | Dec 16, 1998 |
SPY vs XLP Performance
State Street SPDR S&P 500 ETF Trust (SPY) is a ETF from State Street Investment Management and State Street Consumer Staples Select Sector SPDR ETF (XLP) is a ETF from SPDR State Street Global Advisors. Over the past year SPY returned +22.52% while XLP returned +5.62%. Year to date, SPY is up 13.39% versus a gain of 10.38% for XLP.
Over three years, SPY compounded at +21.36% per year against +7.29% for XLP; over five years the annualized figures are +13.19% and +6.08% respectively. Across the full 28-year window we track, SPY has the edge at +8.84% annualized vs +4.84%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
SPY has been the more volatile fund, with annualized monthly volatility of 15.3% compared with 12.5% for XLP. 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 -37.8% for XLP. 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 0.61. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
SPY charges 0.09% per year while XLP 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 2.64% for XLP.
Holdings Overlap
SPY and XLP share 34 holdings out of 504 unique holdings combined, representing a 4.6% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, SPY or XLP?
SPY has an expense ratio of 0.09% while XLP charges 0.08%. XLP is the cheaper option. On a $10,000 investment, that is $1 per year of difference.
Which performed better, SPY or XLP?
Over the past year SPY returned +22.52% vs +5.62% for XLP, so SPY leads on 1-year performance. Over the longest common window we track (28 years), SPY annualized +8.84% vs +4.84% for XLP. Past performance does not guarantee future results.
Which is riskier, SPY or XLP?
SPY has been the more volatile fund at 15.3% annualized versus 12.5% for XLP. Worst drawdown: SPY -56.5% vs XLP -37.8%.
Should I hold both SPY and XLP?
SPY and XLP have a monthly-return correlation of 0.61, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between SPY and XLP?
SPY and XLP share 34 common holdings with a 4.6% weight overlap. Combined, they hold 504 unique securities.
Which pays a higher dividend, SPY or XLP?
SPY yields 1.01% while XLP yields 2.64%, so XLP currently pays the higher dividend yield.
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