SPY vs XLU
State Street SPDR S&P 500 ETF Trust vs State Street Utilities Select Sector SPDR ETF
Quick Verdict
XLU has a lower expense ratio. SPY delivered stronger 1-year returns. SPY offers more diversification with 503 holdings.
Side-by-Side Comparison
| Metric | SPY | XLU | Winner |
|---|---|---|---|
| Expense Ratio | 0.09% | 0.08% | |
| AUM | $789.1B | $23.5B | |
| Dividend Yield | 1.01% | 2.64% | |
| Holdings | 505 | 34 | |
| YTD Return | +14.47% | +3.36% | |
| 1Y Return | +21.96% | +4.70% | |
| 3Y Return (annualized) | +21.70% | +14.60% | |
| 5Y Return (annualized) | +13.30% | +8.31% | |
| Volatility (annualized) | 15.3% | 15.1% | |
| Max Drawdown | -56.5% | -55.7% | |
| Fund Family | State Street Investment Management | SPDR State Street Global Advisors | |
| Category | Equity | Equity | |
| Inception | Jan 22, 1993 | Dec 16, 1998 |
SPY vs XLU Performance
State Street SPDR S&P 500 ETF Trust (SPY) is a ETF from State Street Investment Management and State Street Utilities Select Sector SPDR ETF (XLU) is a ETF from SPDR State Street Global Advisors. Over the past year SPY returned +21.96% while XLU returned +4.70%. Year to date, SPY is up 14.47% versus a gain of 3.36% for XLU.
Over three years, SPY compounded at +21.70% per year against +14.60% for XLU; over five years the annualized figures are +13.30% and +8.31% respectively. Across the full 28-year window we track, SPY has the edge at +8.87% annualized vs +4.62%. 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 15.1% for XLU. 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 -55.7% for XLU. 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 0.46. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
SPY charges 0.09% per year while XLU 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 XLU.
Holdings Overlap
SPY and XLU share 31 holdings out of 504 unique holdings combined, representing a 2.2% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, SPY or XLU?
SPY has an expense ratio of 0.09% while XLU charges 0.08%. XLU is the cheaper option. On a $10,000 investment, that is $1 per year of difference.
Which performed better, SPY or XLU?
Over the past year SPY returned +21.96% vs +4.70% for XLU, so SPY leads on 1-year performance. Over the longest common window we track (28 years), SPY annualized +8.87% vs +4.62% for XLU. Past performance does not guarantee future results.
Which is riskier, SPY or XLU?
SPY has been the more volatile fund at 15.3% annualized versus 15.1% for XLU. Worst drawdown: SPY -56.5% vs XLU -55.7%.
Should I hold both SPY and XLU?
SPY and XLU have a monthly-return correlation of 0.46, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between SPY and XLU?
SPY and XLU share 31 common holdings with a 2.2% weight overlap. Combined, they hold 504 unique securities.
Which pays a higher dividend, SPY or XLU?
SPY yields 1.01% while XLU yields 2.64%, so XLU currently pays the higher dividend yield.
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