SPY vs XLY
State Street SPDR S&P 500 ETF Trust vs State Street Consumer Discretionary Select Sector SPDR ETF
Quick Verdict
XLY has a lower expense ratio. SPY delivered stronger 1-year returns. SPY offers more diversification with 505 holdings.
Side-by-Side Comparison
| Metric | SPY | XLY | Winner |
|---|---|---|---|
| Expense Ratio | 0.09% | 0.08% | |
| AUM | $789.1B | $21.5B | |
| Dividend Yield | 1.01% | 0.77% | |
| Holdings | 505 | 51 | |
| YTD Return | +14.47% | +0.49% | |
| 1Y Return | +21.96% | +3.87% | |
| 3Y Return (annualized) | +21.70% | +12.57% | |
| 5Y Return (annualized) | +13.30% | +6.34% | |
| Volatility (annualized) | 15.3% | 19.2% | |
| Max Drawdown | -56.5% | -60.1% | |
| Fund Family | State Street Investment Management | SPDR State Street Global Advisors | |
| Category | Equity | Equity | |
| Inception | Jan 22, 1993 | Dec 16, 1998 |
SPY vs XLY Performance
State Street SPDR S&P 500 ETF Trust (SPY) is a ETF from State Street Investment Management and State Street Consumer Discretionary Select Sector SPDR ETF (XLY) is a ETF from SPDR State Street Global Advisors. Over the past year SPY returned +21.96% while XLY returned +3.87%. Year to date, SPY is up 14.47% versus a gain of 0.49% for XLY.
Over three years, SPY compounded at +21.70% per year against +12.57% for XLY; over five years the annualized figures are +13.30% and +6.34% respectively. Across the full 28-year window we track, SPY has the edge at +8.87% annualized vs +8.58%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
XLY has been the more volatile fund, with annualized monthly volatility of 19.2% 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 -60.1% for XLY. 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 0.87. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
SPY charges 0.09% per year while XLY 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 0.77% for XLY.
Holdings Overlap
SPY and XLY share 47 holdings out of 504 unique holdings combined, representing a 9.4% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, SPY or XLY?
SPY has an expense ratio of 0.09% while XLY charges 0.08%. XLY is the cheaper option. On a $10,000 investment, that is $1 per year of difference.
Which performed better, SPY or XLY?
Over the past year SPY returned +21.96% vs +3.87% for XLY, so SPY leads on 1-year performance. Over the longest common window we track (28 years), SPY annualized +8.87% vs +8.58% for XLY. Past performance does not guarantee future results.
Which is riskier, SPY or XLY?
XLY has been the more volatile fund at 19.2% annualized versus 15.3% for SPY. Worst drawdown: SPY -56.5% vs XLY -60.1%.
Should I hold both SPY and XLY?
SPY and XLY have a monthly-return correlation of 0.87, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between SPY and XLY?
SPY and XLY share 47 common holdings with a 9.4% weight overlap. Combined, they hold 504 unique securities.
Which pays a higher dividend, SPY or XLY?
SPY yields 1.01% while XLY yields 0.77%, so SPY currently pays the higher dividend yield.
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