XLY vs. XSMO

Last updated Jun 14, 2026

XLY (Consumer Discretionary Select Sector SPDR Fund) and XSMO (Invesco S&P SmallCap Momentum ETF) are both exchange-traded funds - XLY is a Consumer Discretionary Equities fund tracking the Consumer Discretionary Select Sector Index, while XSMO is a Momentum fund tracking the S&P SmallCap 600 Momentum Index. Both are passively managed. Over the past 10 years, XLY returned 12.78%/yr vs 15.17%/yr for XSMO. A 0.73 correlation means they provide meaningful diversification when combined. XLY charges 0.13%/yr vs 0.36%/yr for XSMO.

Performance

XLY vs. XSMO - Performance Comparison

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

Returns By Period

In the year-to-date period, XLY achieves a -2.16% return, which is significantly lower than XSMO's 24.80% return. Over the past 10 years, XLY has underperformed XSMO with an annualized return of 12.78%, while XSMO has yielded a comparatively higher 15.17% annualized return.

XLY

• 1D: 0.26%
• 1M: -1.74%
• YTD: -2.16%
• 6M: -3.01%
• 1Y: 11.01%
• 3Y*: 12.99%
• 5Y*: 7.00%
• 10Y*: 12.78%

XSMO

• 1D: 1.22%
• 1M: 3.48%
• YTD: 24.80%
• 6M: 20.56%
• 1Y: 37.87%
• 3Y*: 24.32%
• 5Y*: 11.65%
• 10Y*: 15.17%

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

XLY vs. XSMO - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
XLY Consumer Discretionary Select Sector SPDR Fund	-2.16%	7.37%	26.51%	39.64%	-36.27%	27.93%	29.63%	28.39%	1.58%	22.82%
XSMO Invesco S&P SmallCap Momentum ETF	24.80%	9.80%	17.45%	21.55%	-15.44%	19.24%	21.96%	28.65%	-3.44%	23.95%

Correlation

The correlation between XLY and XSMO is 0.62, which is moderate. They share some common price drivers but move independently often enough to provide real diversification benefit when combined.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.62
Correlation (3Y) Calculated over the trailing 3-year period	0.66
Correlation (5Y) Calculated over the trailing 5-year period	0.69
Correlation (10Y) Calculated over the trailing 10-year period	0.70
Correlation (All Time) Calculated using the full available price history since Mar 3, 2005	0.73

The correlation between XLY and XSMO shifts across timeframes, from 0.62 (1 year) to 0.73 (all time), reflecting how their relationship changes across market environments.

XLY vs. XSMO - Sectors Allocation Comparison

Sectors	XLY	XSMO
Consumer Cyclical	97.5%	8.6%
Communication Services	1.4%	4.5%
Technology	0.9%	22.1%
Industrials	0.1%	18.7%
Basic Materials	-	6.0%
Consumer Defensive	-	2.4%
Energy	-	2.9%
Financial Services	-	12.2%
Healthcare	-	14.3%
Real Estate	-	4.9%
Utilities	-	3.5%

Return for Risk

XLY vs. XSMO — Risk / Return Rank

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

XLY

XLY Risk / Return Rank: 19
XLY Sharpe Ratio Rank: 19
XLY Sortino Ratio Rank: 19
XLY Omega Ratio Rank: 18
XLY Calmar Ratio Rank: 19
XLY Martin Ratio Rank: 20

XSMO

XSMO Risk / Return Rank: 70
XSMO Sharpe Ratio Rank: 63
XSMO Sortino Ratio Rank: 66
XSMO Omega Ratio Rank: 58
XSMO Calmar Ratio Rank: 84
XSMO Martin Ratio Rank: 80

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. XSMO - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Consumer Discretionary Select Sector SPDR Fund (XLY) and Invesco S&P SmallCap Momentum ETF (XSMO). 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	XSMO	Difference
Sharpe ratio: Return per unit of total volatility	0.55	1.82	-1.27
Sortino ratio: Return per unit of downside risk	0.89	2.62	-1.73
Omega ratio: Gain probability vs. loss probability	1.10	1.31	-0.21
Calmar ratio: Return relative to maximum drawdown	0.67	3.98	-3.31
Martin ratio: Return relative to average drawdown	2.05	13.44	-11.39

XLY vs. XSMO - Sharpe Ratio Comparison

The current XLY Sharpe Ratio is 0.55, which is lower than the XSMO Sharpe Ratio of 1.82. The chart below compares the historical Sharpe Ratios of XLY and XSMO, 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. XSMO - Drawdown Comparison

The maximum XLY drawdown since its inception was -59.05%, roughly equal to the maximum XSMO drawdown of -58.06%. Use the drawdown chart below to compare losses from any high point for XLY and XSMO.

Drawdown Indicators

	XLY	XSMO	Difference
Max Drawdown Largest peak-to-trough decline	-59.05%	-58.06%	-0.99%
Max Drawdown (1Y) Largest decline over 1 year	-14.98%	-8.89%	-6.09%
Max Drawdown (3Y) Largest decline over 3 years	-26.01%	-24.76%	-1.25%
Max Drawdown (5Y) Largest decline over 5 years	-39.67%	-29.62%	-10.05%
Max Drawdown (10Y) Largest decline over 10 years	-39.67%	-39.39%	-0.28%
Current Drawdown Current decline from peak	-6.17%	0.00%	-6.17%
Average Drawdown Average peak-to-trough decline	-9.55%	-11.12%	+1.57%
Ulcer Index Depth and duration of drawdowns from previous peaks	4.88%	2.63%	+2.25%

Volatility

XLY vs. XSMO - Volatility Comparison

The current volatility for Consumer Discretionary Select Sector SPDR Fund (XLY) is 6.19%, while Invesco S&P SmallCap Momentum ETF (XSMO) has a volatility of 7.71%. This indicates that XLY experiences smaller price fluctuations and is considered to be less risky than XSMO based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	XLY	XSMO	Difference
Volatility (1M) Calculated over the trailing 1-month period	6.19%	7.71%	-1.52%
Volatility (6M) Calculated over the trailing 6-month period	13.44%	14.99%	-1.55%
Volatility (1Y) Calculated over the trailing 1-year period	18.27%	19.42%	-1.15%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	23.83%	22.63%	+1.20%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	22.08%	24.15%	-2.07%

XLY vs. XSMO - Expense Ratio Comparison

XLY has a 0.13% expense ratio, which is lower than XSMO's 0.36% expense ratio.

Dividends

XLY vs. XSMO - Dividend Comparison

XLY's dividend yield for the trailing twelve months is around 0.77%, more than XSMO's 0.52% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
XLY Consumer Discretionary Select Sector SPDR Fund	0.77%	0.79%	0.72%	0.78%	1.00%	0.53%	0.82%	1.28%	1.34%	1.20%	1.71%	1.43%
XSMO Invesco S&P SmallCap Momentum ETF	0.52%	0.75%	0.63%	0.96%	1.19%	0.30%	0.82%	0.69%	0.66%	0.27%	0.30%	0.35%

Frequently Asked Questions

Can I hold both XLY and XSMO in my portfolio?

XLY and XSMO have a correlation of 0.62, 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 XSMO?

XSMO has higher volatility (7.71%) compared to XLY (6.19%). In terms of maximum drawdown, XLY dropped -59.05% vs XSMO's -58.06%.

Which ETF is better, XLY or XSMO?

On 10-year performance, XSMO leads with 15.17% vs 12.78% for XLY. On fees, XLY is cheaper at 0.13% per year. On volatility, XLY has been the lower-risk option at 6.19%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, XLY or XSMO?

Over the 10-year period, XSMO has performed better with a 15.17% return vs 12.78%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, XLY or XSMO?

XLY is cheaper with a 0.13% expense ratio, compared with 0.36% for XSMO.

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

XLY has the higher dividend yield at 0.77%, compared with 0.52% for XSMO.

What is the main difference between XLY and XSMO?

XLY is categorized as Consumer Discretionary Equities, while XSMO is Momentum. XLY tracks Consumer Discretionary Select Sector Index, while XSMO tracks S&P SmallCap 600 Momentum Index. They also come from different issuers: State Street and Invesco. Their fees differ too: 0.13% for XLY and 0.36% for XSMO.

Which has better risk-adjusted returns?

XSMO currently has the higher Sharpe Ratio (1.82 vs 0.55), 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.