RTH vs XLY

RTHBVanEck Retail ETF

XLYAState Street Consumer Discretionary Select Sector SPDR ETF

In short

RTH Retail, undiluted. RTH owns roughly 25 of the largest, most liquid US-listed retailers, each required to earn at least half its revenue from selling goods. No car makers or burger chains riding along under the consumer label.

XLY Live since 1998 as one of the original Select Sector SPDRs, XLY bundles the S&P 500's spending-money stocks (cars, couches, burgers, online carts) into one heavily traded ticker at eight basis points.

Stated mandate

RTH The fund seeks to track, before fees and expenses, the price and yield performance of the MVIS US Listed Retail 25 Index through a passive indexing approach.

XLY The fund seeks to track the performance of the Consumer Discretionary Select Sector Index, providing targeted exposure to companies in the consumer discretionary sector.

Why people hold it

• RTH Purity screen: index members must draw at least 50% of revenue from retail, from big-box and grocery to online and specialty, so autos, restaurants and hotels stay out.marketvector.com
• Capped market-cap weighting across the 25 biggest, most liquid retailers means the giants lead. XRT takes the opposite path: modified equal weight spanning large, mid and small caps.marketvector.comssga.com
• No cleverness in the wrapper: a plain passive index fund, normally at least 80% in benchmark names, running on the same MVIS retail index since its 2011 launch.

• XLY Charges 0.08% a year, a fraction of the roughly 0.35% typical for consumer discretionary funds, and tied for the cheapest in its peer group.
• A multi-billion-dollar fund and one of the most actively traded in the category, which generally shows up as tight bid-ask spreads for buyers and sellers.
• Plain mandate: S&P 500 consumer discretionary members, with capping rules that stop any single company from swallowing the index. Pays quarterly.spglobal.com
• Trading since December 1998 as one of the first US sector funds, and it still stands among the strongest implementations in its peer group.

Worth knowing

• RTH 0.35% a year sits at the category median, but broad consumer-discretionary trackers like XLY and VCR charge under a tenth of a percent for a wider net.
• Around 26 holdings with size-led weights: a stumble at one mega-cap retailer shows up in the whole fund.marketvector.com
• Trades lighter than the headline sector ETFs, which can mean wider bid-ask spreads. Distributions land annually or semiannually rather than every quarter.

• XLY About 50 stocks. Even with the index caps, a small handful of megacaps drives most of the movement.spglobal.com
• S&P 500 members only, so smaller retailers and restaurant chains sit outside the index entirely.spglobal.com
• One sector, and a cyclical one: discretionary spending rises and falls with the economy, and the fund is classified as non-diversified.sec.govbritannica.com

Full RTH profile⁠

Full XLY profile⁠