XLY vs. XLF

Last updated Jul 22, 2026

XLY (Consumer Discretionary Select Sector SPDR Fund) and XLF (State Street Financial Select Sector SPDR ETF) are both exchange-traded funds - XLY is a Consumer Discretionary Equities fund tracking the Consumer Discretionary Select Sector Index, while XLF is a Financials Equities fund tracking the Financial Select Sector Index. Both are passively managed. Over the past 10 years, XLY returned 12.06%/yr vs 13.38%/yr for XLF. A 0.69 correlation means they provide meaningful diversification when combined. XLY charges 0.13%/yr vs 0.08%/yr for XLF.

Performance

XLY vs. XLF - Performance Comparison

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

Returns By Period

In the year-to-date period, XLY achieves a -3.42% return, which is significantly lower than XLF's 3.34% return. Over the past 10 years, XLY has underperformed XLF with an annualized return of 12.06%, while XLF has yielded a comparatively higher 13.38% annualized return.

XLY

• 1D: 0.23%
• 1M: -1.76%
• 6M: -3.18%
• YTD: -3.42%
• 1Y: 3.72%
• 3Y*: 11.25%
• 5Y*: 5.68%
• 10Y*: 12.06%
• ALL TIME*: 9.55%

XLF

• 1D: 0.12%
• 1M: 5.11%
• 6M: 6.38%
• YTD: 3.34%
• 1Y: 8.76%
• 3Y*: 18.61%
• 5Y*: 11.07%
• 10Y*: 13.38%
• ALL TIME*: 6.04%

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

XLY vs. XLF - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
XLY Consumer Discretionary Select Sector SPDR Fund	-3.42%	7.37%	26.51%	39.64%	-36.27%	27.93%	29.63%	28.39%	1.58%	22.82%
XLF State Street Financial Select Sector SPDR ETF	3.34%	14.90%	30.56%	12.03%	-10.59%	34.80%	-1.74%	31.88%	-13.06%	22.00%

Correlation

The correlation between XLY and XLF is 0.49, which is low. Their price movements are largely independent, making them effective diversification partners.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.49
Correlation (3Y) Calculated over the trailing 3-year period	0.56
Correlation (5Y) Calculated over the trailing 5-year period	0.62
Correlation (10Y) Calculated over the trailing 10-year period	0.61
Correlation (All Time) Calculated using the full available price history since Dec 22, 1998	0.69

The correlation between XLY and XLF shifts across timeframes, from 0.49 (1 year) to 0.69 (all time), reflecting how their relationship changes across market environments.

XLY vs. XLF - Sectors Allocation Comparison

Sectors	XLY	XLF
Consumer Cyclical	97.1%	-
Communication Services	1.8%	-
Technology	1.0%	1.6%
Industrials	0.1%	0.2%
Basic Materials	-	-
Consumer Defensive	-	-
Energy	-	-
Financial Services	-	98.2%
Healthcare	-	-
Real Estate	-	-
Utilities	-	-

Return for Risk

XLY vs. XLF — Risk / Return Rank

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

XLY

XLY Risk / Return Rank: 14
XLY Sharpe Ratio Rank: 14
XLY Sortino Ratio Rank: 14
XLY Omega Ratio Rank: 13
XLY Calmar Ratio Rank: 14
XLY Martin Ratio Rank: 15

XLF

XLF Risk / Return Rank: 21
XLF Sharpe Ratio Rank: 24
XLF Sortino Ratio Rank: 22
XLF Omega Ratio Rank: 22
XLF Calmar Ratio Rank: 20
XLF Martin Ratio Rank: 20

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.

XLY vs. XLF - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Consumer Discretionary Select Sector SPDR Fund (XLY) and State Street Financial Select Sector SPDR ETF (XLF). 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.

	XLY	XLF	Difference
Sharpe ratio: Return per unit of total volatility	0.20	0.60	-0.40
Sortino ratio: Return per unit of downside risk	0.41	0.91	-0.49
Omega ratio: Gain probability vs. loss probability	1.05	1.11	-0.07
Calmar ratio: Return relative to maximum drawdown	0.25	0.59	-0.35
Martin ratio: Return relative to average drawdown	0.71	1.51	-0.80

XLY vs. XLF - Sharpe Ratio Comparison

The current XLY Sharpe Ratio is 0.20, which is lower than the XLF Sharpe Ratio of 0.60. The chart below compares the historical Sharpe Ratios of XLY and XLF, 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

XLY vs. XLF - Drawdown Comparison

The maximum XLY drawdown since its inception was -59.05%, smaller than the maximum XLF drawdown of -82.69%. Use the drawdown chart below to compare losses from any high point for XLY and XLF.

Drawdown Indicators

	XLY	XLF	Difference
Max Drawdown Largest peak-to-trough decline	-59.05%	-82.69%	+23.64%
Max Drawdown (1Y) Largest decline over 1 year	-14.98%	-14.79%	-0.19%
Max Drawdown (3Y) Largest decline over 3 years	-26.01%	-15.54%	-10.47%
Max Drawdown (5Y) Largest decline over 5 years	-39.67%	-25.81%	-13.86%
Max Drawdown (10Y) Largest decline over 10 years	-39.67%	-42.86%	+3.19%
Current Drawdown Current decline from peak	-7.38%	-1.13%	-6.25%
Average Drawdown Average peak-to-trough decline	-9.54%	-19.94%	+10.40%
Ulcer Index Depth and duration of drawdowns from previous peaks	5.27%	5.81%	-0.54%

Volatility

XLY vs. XLF - Volatility Comparison

Consumer Discretionary Select Sector SPDR Fund (XLY) has a higher volatility of 5.26% compared to State Street Financial Select Sector SPDR ETF (XLF) at 3.91%. This indicates that XLY's price experiences larger fluctuations and is considered to be riskier than XLF based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	XLY	XLF	Difference
Volatility (1M) Calculated over the trailing 1-month period	5.26%	3.91%	+1.35%
Volatility (6M) Calculated over the trailing 6-month period	14.15%	11.28%	+2.87%
Volatility (1Y) Calculated over the trailing 1-year period	18.70%	14.63%	+4.07%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	23.95%	18.44%	+5.51%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	22.10%	22.07%	+0.03%

XLY vs. XLF - Expense Ratio Comparison

XLY has a 0.13% expense ratio, which is higher than XLF's 0.08% expense ratio. However, both funds are considered low-cost compared to the broader market, where average expense ratios usually range from 0.3% to 0.9%.

Dividends

XLY vs. XLF - Dividend Comparison

XLY's dividend yield for the trailing twelve months is around 0.79%, less than XLF's 1.44% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
XLF State Street Financial Select Sector SPDR ETF	1.44%	1.31%	1.42%	1.71%	2.04%	1.63%	2.03%	1.87%	2.08%	1.48%	21.10%	1.95%
XLY Consumer Discretionary Select Sector SPDR Fund	0.79%	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 XLY and XLF in my portfolio?

XLY and XLF have a correlation of 0.49, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, XLY or XLF?

XLY has higher volatility (5.26%) compared to XLF (3.91%). In terms of maximum drawdown, XLY dropped -59.05% vs XLF's -82.69%.

Which ETF is better, XLY or XLF?

On 10-year performance, XLF leads with 13.38% vs 12.06% for XLY. On fees, XLF is cheaper at 0.08% per year. On volatility, XLF has been the lower-risk option at 3.91%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, XLY or XLF?

Over the 10-year period, XLF has performed better with a 13.38% return vs 12.06%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, XLY or XLF?

XLF is cheaper with a 0.08% expense ratio, compared with 0.13% for XLY.

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

XLF has the higher dividend yield at 1.44%, compared with 0.79% for XLY.

What is the main difference between XLY and XLF?

XLY is categorized as Consumer Discretionary Equities, while XLF is Financials Equities. XLY tracks Consumer Discretionary Select Sector Index, while XLF tracks Financial Select Sector Index. Their fees differ too: 0.13% for XLY and 0.08% for XLF.

Which has better risk-adjusted returns?

XLF currently has the higher Sharpe Ratio (0.60 vs 0.20), 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.