XLF vs. IYG

Last updated Jun 4, 2026

XLF (State Street Financial Select Sector SPDR ETF) and IYG (iShares U.S. Financial Services ETF) are both Financials Equities funds - XLF tracks the Financial Select Sector Index while IYG tracks the Dow Jones U.S. Financial Services TR. Both are passively managed. Over the past 10 years, XLF returned 12.38%/yr vs 13.37%/yr for IYG. With a 0.96 correlation, they move nearly in lockstep. XLF charges 0.08%/yr vs 0.42%/yr for IYG.

Performance

XLF vs. IYG - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in State Street Financial Select Sector SPDR ETF (XLF) and iShares U.S. Financial Services ETF (IYG). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

The year-to-date returns for both investments are quite close, with XLF having a -6.64% return and IYG slightly higher at -6.51%. Over the past 10 years, XLF has underperformed IYG with an annualized return of 12.38%, while IYG has yielded a comparatively higher 13.37% annualized return.

XLF

• 1D: -1.15%
• 1M: -1.38%
• YTD: -6.64%
• 6M: -4.18%
• 1Y: 1.13%
• 3Y*: 17.64%
• 5Y*: 7.61%
• 10Y*: 12.38%

IYG

• 1D: -1.15%
• 1M: -1.17%
• YTD: -6.51%
• 6M: -4.06%
• 1Y: 5.67%
• 3Y*: 20.32%
• 5Y*: 7.86%
• 10Y*: 13.37%

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

XLF vs. IYG - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
XLF State Street Financial Select Sector SPDR ETF	-6.64%	14.90%	30.56%	12.03%	-10.59%	34.80%	-1.74%	31.88%	-13.06%	22.00%
IYG iShares U.S. Financial Services ETF	-6.51%	19.85%	31.94%	16.07%	-16.76%	30.36%	0.99%	37.62%	-12.56%	24.47%

Correlation

The correlation between XLF and IYG is 0.98 - these two move nearly in lockstep. At this level, holding both provides almost no diversification benefit. If you already own one, adding the other does little to reduce portfolio risk.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.98
Correlation (3Y) Calculated over the trailing 3-year period	0.98
Correlation (5Y) Calculated over the trailing 5-year period	0.97
Correlation (10Y) Calculated over the trailing 10-year period	0.97
Correlation (All Time) Calculated using the full available price history since Jun 22, 2000	0.96

The correlation between XLF and IYG has been stable across timeframes, ranging from 0.96 to 0.98 - a consistent structural relationship.

XLF vs. IYG - Sectors Allocation Comparison

Sectors	XLF	IYG
Financial Services	98.0%	100.0%
Technology	1.8%	-
Industrials	0.2%	-
Basic Materials	-	-
Communication Services	-	-
Consumer Cyclical	-	-
Consumer Defensive	-	-
Energy	-	-
Healthcare	-	-
Real Estate	-	-
Utilities	-	-

Return for Risk

XLF vs. IYG — Risk / Return Rank

Compare risk-adjusted metric ranks to identify better-performing investments over the past 12 months.

XLF

XLF Risk / Return Rank: 9
XLF Sharpe Ratio Rank: 9
XLF Sortino Ratio Rank: 9
XLF Omega Ratio Rank: 9
XLF Calmar Ratio Rank: 9
XLF Martin Ratio Rank: 9

IYG

IYG Risk / Return Rank: 13
IYG Sharpe Ratio Rank: 14
IYG Sortino Ratio Rank: 13
IYG Omega Ratio Rank: 13
IYG Calmar Ratio Rank: 13
IYG Martin Ratio Rank: 13

The rank (0–100) shows how this investment's returns compare to the risk taken. Higher = better. Based on the past 12 months of data, combining Sharpe, Sortino, and other metrics used by quantitative funds and institutional investors.

XLF vs. IYG - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for State Street Financial Select Sector SPDR ETF (XLF) and iShares U.S. Financial Services ETF (IYG). 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.

	XLF	IYG	Difference
Sharpe ratio: Return per unit of total volatility	0.08	0.37	-0.29
Sortino ratio: Return per unit of downside risk	0.20	0.59	-0.39
Omega ratio: Gain probability vs. loss probability	1.02	1.07	-0.05
Calmar ratio: Return relative to maximum drawdown	0.08	0.36	-0.28
Martin ratio: Return relative to average drawdown	0.20	0.93	-0.73
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

XLF vs. IYG - Sharpe Ratio Comparison

The current XLF Sharpe Ratio is 0.08, which is lower than the IYG Sharpe Ratio of 0.37. The chart below compares the historical Sharpe Ratios of XLF and IYG, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Sharpe Ratios by Period

	XLF	IYG	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	0.08	0.37	-0.29
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	0.41	0.39	+0.02
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	0.56	0.57	-0.01
Sharpe Ratio (All Time) Calculated using the full available price history	0.20	0.22	-0.02

Drawdowns

XLF vs. IYG - Drawdown Comparison

The maximum XLF drawdown since its inception was -82.69%, roughly equal to the maximum IYG drawdown of -81.84%. Use the drawdown chart below to compare losses from any high point for XLF and IYG.

Drawdown Indicators

	XLF	IYG	Difference
Max Drawdown Largest peak-to-trough decline	-82.69%	-81.84%	-0.85%
Max Drawdown (1Y) Largest decline over 1 year	-14.79%	-15.90%	+1.11%
Max Drawdown (3Y) Largest decline over 3 years	-15.54%	-18.54%	+3.00%
Max Drawdown (5Y) Largest decline over 5 years	-25.81%	-29.62%	+3.81%
Max Drawdown (10Y) Largest decline over 10 years	-42.86%	-44.32%	+1.46%
Current Drawdown Current decline from peak	-9.34%	-9.77%	+0.43%
Average Drawdown Average peak-to-trough decline	-20.03%	-20.75%	+0.72%
Ulcer Index Depth and duration of drawdowns from previous peaks	5.66%	6.09%	-0.43%

Volatility

XLF vs. IYG - Volatility Comparison

State Street Financial Select Sector SPDR ETF (XLF) and iShares U.S. Financial Services ETF (IYG) have volatilities of 3.29% and 3.38%, respectively, indicating that both stocks experience similar levels of price fluctuations. This suggests that the risk associated with both stocks, as measured by volatility, is nearly the same. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	XLF	IYG	Difference
Volatility (1M) Calculated over the trailing 1-month period	3.29%	3.38%	-0.09%
Volatility (6M) Calculated over the trailing 6-month period	10.94%	11.78%	-0.84%
Volatility (1Y) Calculated over the trailing 1-year period	14.41%	15.40%	-0.99%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	18.63%	20.43%	-1.80%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	22.16%	23.53%	-1.37%

XLF vs. IYG - Expense Ratio Comparison

XLF has a 0.08% expense ratio, which is lower than IYG's 0.42% expense ratio.

Dividends

XLF vs. IYG - Dividend Comparison

XLF's dividend yield for the trailing twelve months is around 1.56%, more than IYG's 1.14% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
IYG iShares U.S. Financial Services ETF	1.14%	1.00%	1.16%	1.77%	2.07%	1.25%	1.71%	1.59%	1.81%	1.24%	1.28%	1.33%
XLF State Street Financial Select Sector SPDR ETF	1.56%	1.31%	1.42%	1.71%	2.04%	1.63%	2.03%	1.87%	2.08%	1.48%	21.10%	1.95%

Frequently Asked Questions

Can I hold both XLF and IYG in my portfolio?

With a correlation of 0.98, XLF and IYG move almost identically. Holding both adds very little diversification - you're essentially doubling your position in the same market segment. Choosing one is usually more capital-efficient.

Which is riskier, XLF or IYG?

IYG has higher volatility (3.38%) compared to XLF (3.29%). In terms of maximum drawdown, XLF dropped -82.69% vs IYG's -81.84%.

Which ETF is better, XLF or IYG?

On 10-year performance, IYG leads with 13.37% vs 12.38% for XLF. On fees, XLF is cheaper at 0.08% per year. Their volatility is very similar. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, XLF or IYG?

Over the 10-year period, IYG has performed better with a 13.37% return vs 12.38%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, XLF or IYG?

XLF is cheaper with a 0.08% expense ratio, compared with 0.42% for IYG.

Which ETF pays a higher dividend yield, XLF or IYG?

XLF has the higher dividend yield at 1.56%, compared with 1.14% for IYG.

What is the main difference between XLF and IYG?

XLF tracks Financial Select Sector Index, while IYG tracks Dow Jones U.S. Financial Services TR. They also come from different issuers: State Street and iShares. Their fees differ too: 0.08% for XLF and 0.42% for IYG.

Which has better risk-adjusted returns?

IYG currently has the higher Sharpe Ratio (0.37 vs 0.08), 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.