What is the main difference between XLY and XRT?

XLY focuses on the broader Consumer Discretionary sector, while XRT targets the specific retail sub-sector. XLY holds mega-cap companies like Amazon and Tesla, reflecting a wide consumer spending theme. In contrast, XRT is highly diversified within retail, holding smaller, more evenly weighted companies like GameStop and eBay. This structural difference means XLY offers concentrated exposure to large consumer trends, whereas XRT provides a niche focus on the retail industry's health.

How does sector classification affect these ETFs?

Both funds are classified as Consumer Cyclical, meaning their performance correlates with economic cycles. During economic expansions, consumer spending typically rises, benefiting both funds. However, they react differently to specific trends. XLY captures broad discretionary spending through giants like Amazon and Tesla, which can influence market direction. XRT focuses solely on retail sales, offering exposure to consumer behaviour specifically within stores and online retail platforms, distinct from broader lifestyle or technology sectors.

What is the impact of the 0.27 percentage point fee difference?

XLY has an expense ratio of 0.08%, while XRT charges 0.35%. This 0.27 percentage point difference means lower costs for XLY over time. For example, on an initial £10,000 investment, XLY's annual fee would be £8, compared to £35 for XRT. Over a decade, assuming constant assets, this could equate to £270 in extra fees for XRT. Higher fees reduce net returns, making the cost structure a significant factor in long-term performance comparisons.

How do the dividend yields of XLY and XRT compare?

XRT offers a slightly higher dividend yield of 0.90% compared to XLY's 0.83%. Both yields are relatively low, reflecting that these sectors often prioritise capital growth or share buybacks over dividends. Amazon and Tesla, major XLY holdings, typically do not pay dividends, influencing the fund's overall yield. XRT's slightly higher yield may appeal to income-focused investors, though both funds are better suited for total return strategies rather than pure income generation.

How do the holdings of these two ETFs overlap?

There is no overlap in the top ten holdings of XLY and XRT. XLY is dominated by mega-cap companies like Amazon and Tesla, while XRT holds a diverse range of retailers with small individual weights, such as GameStop and eBay. This complete absence of shared top holdings suggests that combining these funds could offer distinct sources of exposure within the consumer sector, potentially reducing concentration risk compared to holding just one fund.

How does the top holding weight affect risk?

XLY has a high concentration risk, with Amazon representing 23.36% of its portfolio. A significant move in Amazon's share price can heavily influence XLY's performance. In contrast, XRT is highly diversified, with its top holding, GameStop, making up just 1.65%. This even distribution means no single company dominates XRT's returns, potentially reducing specific company risk. Investors should consider their tolerance for concentration when comparing these two distinct portfolio structures.

How does liquidity differ between these two ETFs?

XLY boasts substantial net assets of $21.8 billion, which typically supports high liquidity and tighter bid-ask spreads. XRT, with $353 million in net assets, is significantly smaller. While both are SPDR products, the large asset base of XLY suggests easier entry and exit for larger trades. The smaller size of XRT might lead to slightly higher trading costs for substantial positions, although this varies with market conditions and trading volumes.

What are the distinct sector exposures of XLY and XRT?

XLY provides broad exposure to consumer discretionary, including e-commerce, automobiles, home improvement, and lodging. XRT narrows the focus exclusively to retail, including apparel, electronics, and grocery stores. This means XLY captures trends across various consumer services and products, while XRT acts as a specific bet on the retail landscape. Investors might choose one over the other based on whether they want broader consumer trends or a targeted view on the retail industry's performance.

How do the inception dates influence the funds' track records?

XLY was launched on 16 December 1998, giving it a long track record spanning over two decades. This allows for a more comprehensive history of performance during various market cycles. XRT started on 19 June 2006, providing a substantial but shorter history. The longer track record of XLY may offer more data for analysing its behaviour in different economic conditions, while XRT provides a more specific, focused view on the retail sector's evolution.

Which ETF is better for income versus growth?

Neither fund is primarily suited for pure income generation, given their low yields of 0.83% and 0.90%. Both are typically associated with capital growth and total return strategies. XLY's mega-cap holdings may offer growth through market leadership and innovation, while XRT's diversified retail approach provides growth through sector-specific recovery. Income-focused investors should look beyond these ETFs, though those seeking growth within the consumer sector might use these tools for sector-specific capital appreciation rather than regular distributions.

Should investors consider both funds in a portfolio?

Since there is no overlap in their top ten holdings, XLY and XRT offer distinct exposures within the Consumer Cyclical category. An investor might combine them to gain a broader view of the consumer economy, blending XLY's mega-cap discretionary leaders with XRT's specific retail sector focus. However, this increases portfolio complexity and management fees. Investors should assess if the distinct concentration of XLY complements the diversification of XRT to align with their strategic allocation to consumer-facing industries.

How do the expense ratios compare to similar ETFs?

XLY's expense ratio of 0.08% is notably low, typical for large, core sector ETFs that benefit from scale. XRT's 0.35% fee is higher, reflecting its smaller net assets of $353 million and more specialized retail focus. When comparing to similar funds, XLY offers a cost-effective broad sector play. XRT's higher fee requires its specific retail exposure to deliver a return that justifies the additional cost over time, which is a key consideration for fee-sensitive investors.

XLY vs XRT

Two funds, one decision: we compare cost, performance and what each ETF actually holds in September 2026.

Compare XLY and XRT to assess fees, holdings, dividends and how each SPDR fund tracks its target market. XLY focuses on consumer discretionary, while XRT targets retail. This page helps you evaluate these ETFs side by side. Educational content, not financial advice.

Compare XLY and XRT to assess fees, holdings, dividends and how each SPDR fund tracks its target market. XLY focuses on consumer discretionary, while XRT targets retail. This page helps you evaluate t...

Fund Snapshot

Key Fund Metrics

XLY

Metric

XRT

0.08%

Expense Ratio

0.35%

0.83%

Dividend Yield

0.90%

$21.78B

Net Assets

$352.65M

50

Holdings

76

Dec 16, 1998

Inception Date

Jun 19, 2006

–

Index Tracked

–

Consumer Cyclical

Fund Category

Consumer Cyclical

XLY costs about $27.00 less per year for every $10,000 invested.

Shared Top Holdings

These funds do not share any of their top holdings.

Investment Analysis

XLY

Pros

Low expense ratio of 0.08% reduces cost drag.
Large net assets of $21.8 billion support liquidity.
Long track record since Dec 1998 aids reliability.

Considerations

High AMZN weight of 23.36% increases concentration risk.
Top holdings are all mega caps with lower upside.
Low dividend yield of 0.83% limits income.

XRT

Pros

Highly diversified with top holding only 1.65%.
Higher dividend yield of 0.90% boosts income.
Focus on retail offers distinct sector exposure.

Considerations

Expense ratio of 0.35% is notably high.
Net assets of $353 million limit scale.
No holdings overlap reduces diversification benefits.

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About XLY and XRT

XLY (XLY)

XLY (Consumer Discret Sel Sect SPDR ETF) is a sector-focused exchange-traded fund that provides targeted exposure to US consumer discretionary companies — firms in retail, leisure, autos, media and related services. As a sector ETF, it concentrates on businesses whose revenues are sensitive to consumer spending and economic cycles, so it tends to be more growth-oriented and can be more volatile than broad-market funds. Investors use XLY to gain concentrated exposure to trends in retail, e-commerce, travel and durable goods, or to express a view on consumer demand. Because it focuses on a single sector, diversification is limited and performance can swing with the economic cycle. This summary is for educational purposes only and not personalised advice. Consider your investment goals, risk tolerance and the ETF’s suitability for your portfolio; values and income can fall as well as rise.

XRT (XRT)

S&P Retail SPDR ETF (XRT) is an exchange-traded fund that offers targeted exposure to the US retail sector by tracking a retail-focused index. Unlike market-cap-weighted sector ETFs, XRT is equal-weighted across its holdings, so smaller and mid-sized retailers can have similar influence to larger chains. That structure may increase volatility and turnover, making the fund more suitable for investors seeking a concentrated retail play or tactical sector exposure rather than a broad-market core holding. XRT's holdings typically span specialty retailers, online merchants, discount chains and department stores, so performance is tied closely to consumer spending patterns and retail-specific trends. Investors should weigh sector concentration risk, trading costs, fees and tax implications, and remember past performance does not guarantee future returns. This information is general and educational, not personal investment advice; consider your risk tolerance and investment goals or consult a professional before investing.

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XLY vs XRT

Fund Snapshot

Investment Analysis

XLY

Pros

Considerations

XRT

Pros

Considerations

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Fund Snapshot

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