XLB vs. XLY

Last updated Aug 2, 2026

XLB (Materials Select Sector SPDR ETF) and XLY (Consumer Discretionary Select Sector SPDR Fund) are both exchange-traded funds - XLB is a Materials fund tracking the Materials Select Sector Index, while XLY is a Consumer Discretionary Equities fund tracking the Consumer Discretionary Select Sector Index. Both are passively managed. Over the past 10 years, XLB returned 9.81%/yr vs 12.33%/yr for XLY. Their 0.64 correlation means they have sometimes moved together and sometimes differently. Both charge a 0.13% expense ratio.

Performance

XLB vs. XLY - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Materials Select Sector SPDR ETF (XLB) and Consumer Discretionary Select Sector SPDR Fund (XLY). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, XLB achieves a 12.12% return, which is significantly higher than XLY's -2.39% return. Over the past 10 years, XLB has underperformed XLY with an annualized return of 9.81%, while XLY has yielded a comparatively higher 12.33% annualized return.

XLB

• 1D: -2.34%
• 1M: -3.04%
• 6M: 3.20%
• YTD: 12.12%
• 1Y: 18.42%
• 3Y*: 7.78%
• 5Y*: 5.80%
• 10Y*: 9.81%
• ALL TIME*: 8.29%

XLY

• 1D: 3.29%
• 1M: -0.88%
• 6M: -3.81%
• YTD: -2.39%
• 1Y: 8.28%
• 3Y*: 11.47%
• 5Y*: 6.04%
• 10Y*: 12.33%
• ALL TIME*: 9.58%

*Multi-year figures are annualized to reflect compound growth (CAGR)

Liquidity Comparison

Position	Avg. Volume Value (2W)	Avg. Volume Value (1M)	Avg. Volume Value (3M)
XLB Materials Select Sector SPDR ETF	$592.07M	$578.31M	$592.29M
XLY Consumer Discretionary Select Sector SPDR Fund	$945.87M	$987.54M	$948.83M

XLB vs. XLY - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
XLB Materials Select Sector SPDR ETF	12.12%	9.94%	0.15%	12.46%	-12.30%	27.44%	20.46%	24.13%	-14.88%	24.01%
XLY Consumer Discretionary Select Sector SPDR Fund	-2.39%	7.37%	26.51%	39.64%	-36.27%	27.93%	29.63%	28.39%	1.58%	22.82%

Correlation

The correlation between XLB and XLY is 0.46, which is low. Their historical price movements had little consistent relationship.

	Correlation
Correlation (1Y) Focuses on recent behavior, but can change the most.	0.46
Correlation (3Y) Balances recent behavior with more history.	0.56
Correlation (5Y) Shows whether the relationship held over a longer period.	0.60
Correlation (10Y) Provides a long-term view across more market conditions.	0.63
Correlation (All Time) Calculated using the full available price history since Dec 22, 1998	0.64

The correlation between XLB and XLY shifts across timeframes, from 0.46 (1 year) to 0.64 (all time), reflecting how their relationship changes across market environments.

XLB vs. XLY - Sectors Allocation Comparison

Sectors	XLB	XLY
Basic Materials	84.6%	-
Consumer Cyclical	15.4%	97.1%
Industrials	1.5%	0.1%
Communication Services	-	1.7%
Consumer Defensive	-	-
Energy	-	-
Financial Services	-	-
Healthcare	-	-
Real Estate	-	-
Technology	-	1.1%
Utilities	-	-

Return for Risk

XLB vs. XLY — Risk / Return Rank

Compare historical risk-adjusted metric ranks over the past 12 months.

XLB

XLB Risk / Return Rank: 39
XLB Sharpe Ratio Rank: 39
XLB Sortino Ratio Rank: 39
XLB Omega Ratio Rank: 37
XLB Calmar Ratio Rank: 40
XLB Martin Ratio Rank: 39

XLY

XLY Risk / Return Rank: 17
XLY Sharpe Ratio Rank: 17
XLY Sortino Ratio Rank: 17
XLY Omega Ratio Rank: 17
XLY Calmar Ratio Rank: 17
XLY Martin Ratio Rank: 18

The rank (0–100) uses a weighted average of the Sharpe, Sortino, Omega, Calmar, and Martin percentile ranks for the trailing 12 months. Higher means stronger historical risk-adjusted performance within the peer group.

XLB vs. XLY - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Materials Select Sector SPDR ETF (XLB) and Consumer Discretionary Select Sector SPDR Fund (XLY). Risk-adjusted metrics are performance indicators that assess an investment's returns in relation to its risk, enabling a more accurate comparison of different investment options.

Values are calculated on a 1-year rolling basis and updated daily. Risk-adjusted metrics are more stable over longer periods — use the period switch above to explore them.

	XLB	XLY	Difference
Sharpe ratio: Return per unit of total volatility	0.97	0.29	+0.68
Sortino ratio: Return per unit of downside risk	1.46	0.54	+0.92
Omega ratio: Gain probability vs. loss probability	1.17	1.06	+0.11
Calmar ratio: Return relative to maximum drawdown	1.38	0.38	+1.00
Martin ratio: Return relative to average drawdown	4.12	1.03	+3.09

XLB vs. XLY - Sharpe Ratio Comparison

The current XLB Sharpe Ratio is 0.97, which is higher than the XLY Sharpe Ratio of 0.29. The chart below compares the historical Sharpe Ratios of XLB and XLY, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Drawdowns

XLB vs. XLY - Drawdown Comparison

The maximum XLB drawdown since its inception was -59.83%, roughly equal to the maximum XLY drawdown of -59.05%. Use the drawdown chart below to compare losses from any high point for XLB and XLY.

Drawdown Indicators

	XLB	XLY	Difference
Max Drawdown Largest peak-to-trough decline	-59.83%	-59.05%	-0.78%
Max Drawdown (1Y) Largest decline over 1 year	-12.38%	-14.98%	+2.60%
Max Drawdown (3Y) Largest decline over 3 years	-23.17%	-26.01%	+2.84%
Max Drawdown (5Y) Largest decline over 5 years	-24.72%	-39.67%	+14.95%
Max Drawdown (10Y) Largest decline over 10 years	-37.27%	-39.67%	+2.40%
Current Drawdown Current decline from peak	-5.18%	-6.40%	+1.22%
Average Drawdown Average peak-to-trough decline	-10.80%	-9.54%	-1.26%
Ulcer Index Depth and duration of drawdowns from previous peaks	4.15%	5.53%	-1.38%

Volatility

XLB vs. XLY - Volatility Comparison

The current volatility for Materials Select Sector SPDR ETF (XLB) is 5.87%, while Consumer Discretionary Select Sector SPDR Fund (XLY) has a volatility of 7.28%. This indicates that XLB experiences smaller price fluctuations and is considered to be less risky than XLY based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	XLB	XLY	Difference
Volatility (1M) Calculated over the trailing 1-month period	5.87%	7.28%	-1.41%
Volatility (6M) Calculated over the trailing 6-month period	14.11%	15.04%	-0.93%
Volatility (1Y) Calculated over the trailing 1-year period	17.72%	19.53%	-1.81%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	19.10%	24.07%	-4.97%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	20.67%	22.18%	-1.51%

XLB vs. XLY - Expense Ratio Comparison

Both XLB and XLY have an expense ratio of 0.13%, making them cost-effective options compared to the broader market, where average expense ratios typically range from 0.3% to 0.9%.

Dividends

XLB vs. XLY - Dividend Comparison

XLB's dividend yield for the trailing twelve months is around 1.68%, more than XLY's 0.78% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
XLB Materials Select Sector SPDR ETF	1.68%	1.92%	1.92%	2.00%	2.26%	1.62%	1.72%	1.98%	2.20%	1.66%	1.95%	2.24%
XLY Consumer Discretionary Select Sector SPDR Fund	0.78%	0.79%	0.72%	0.78%	1.00%	0.53%	0.82%	1.28%	1.34%	1.20%	1.71%	1.43%

Frequently Asked Questions

Can I hold both XLB and XLY in my portfolio?

XLB and XLY have a correlation of 0.46, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, XLB or XLY?

XLY has higher volatility (7.28%) compared to XLB (5.87%). In terms of maximum drawdown, XLB dropped -59.83% vs XLY's -59.05%.

Which ETF is better, XLB or XLY?

On 10-year performance, XLY leads with 12.33% vs 9.81% for XLB. Both ETFs have the same 0.13% expense ratio. On volatility, XLB has been the lower-risk option at 5.87%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, XLB or XLY?

Over the 10-year period, XLY has performed better with a 12.33% return vs 9.81%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, XLB or XLY?

XLB and XLY have the same expense ratio: 0.13% per year.

Which ETF pays a higher dividend yield, XLB or XLY?

XLB has the higher dividend yield at 1.68%, compared with 0.78% for XLY.

What is the main difference between XLB and XLY?

XLB is categorized as Materials, while XLY is Consumer Discretionary Equities. XLB tracks Materials Select Sector Index, while XLY tracks Consumer Discretionary Select Sector Index.

Which has better risk-adjusted returns?

XLB currently has the higher Sharpe Ratio (0.97 vs 0.29), meaning it's delivered slightly more return per unit of risk over the trailing 12 months. However, this ranking shifts over time - use the Risk/Return Score above for a more comprehensive view that combines Sharpe, Sortino, and other measures used by quantitative funds.