XSMO vs. XLY

Last updated Jun 14, 2026

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

Performance

XSMO vs. XLY - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Invesco S&P SmallCap Momentum ETF (XSMO) 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, XSMO achieves a 24.80% return, which is significantly higher than XLY's -2.16% return. Over the past 10 years, XSMO has outperformed XLY with an annualized return of 15.17%, while XLY has yielded a comparatively lower 12.78% annualized return.

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%

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%

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

XSMO vs. XLY - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
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%
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%

Correlation

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

XSMO vs. XLY - Sectors Allocation Comparison

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

Return for Risk

XSMO vs. XLY — Risk / Return Rank

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

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

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

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.

XSMO vs. XLY - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Invesco S&P SmallCap Momentum ETF (XSMO) 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.

	XSMO	XLY	Difference
Sharpe ratio: Return per unit of total volatility	1.82	0.55	+1.27
Sortino ratio: Return per unit of downside risk	2.62	0.89	+1.73
Omega ratio: Gain probability vs. loss probability	1.31	1.10	+0.21
Calmar ratio: Return relative to maximum drawdown	3.98	0.67	+3.31
Martin ratio: Return relative to average drawdown	13.44	2.05	+11.39

XSMO vs. XLY - Sharpe Ratio Comparison

The current XSMO Sharpe Ratio is 1.82, which is higher than the XLY Sharpe Ratio of 0.55. The chart below compares the historical Sharpe Ratios of XSMO 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

XSMO vs. XLY - Drawdown Comparison

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

Drawdown Indicators

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

Volatility

XSMO vs. XLY - Volatility Comparison

Invesco S&P SmallCap Momentum ETF (XSMO) has a higher volatility of 7.71% compared to Consumer Discretionary Select Sector SPDR Fund (XLY) at 6.19%. This indicates that XSMO's price experiences larger fluctuations and is considered to be riskier than XLY based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

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

XSMO vs. XLY - Expense Ratio Comparison

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

Dividends

XSMO vs. XLY - Dividend Comparison

XSMO's dividend yield for the trailing twelve months is around 0.52%, less than XLY's 0.77% 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 XSMO and XLY in my portfolio?

XSMO and XLY 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, XSMO or XLY?

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

Which ETF is better, XSMO or XLY?

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, XSMO or XLY?

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, XSMO or XLY?

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

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

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

What is the main difference between XSMO and XLY?

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

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.