VCR vs XRT

VCRBVanguard Consumer Discretionary ETF

XRTBState Street SPDR S&P Retail ETF

In short

VCR Consumer discretionary, the whole aisle. VCR tracks roughly 300 US retailers, carmakers, restaurants and travel names across large, mid and small caps for 0.09% a year, instead of stopping at the S&P 500's handful of giants.

XRT Pure retail, not broad consumer discretionary. XRT equal-weights roughly 80 store chains and online sellers, so a small-cap mall retailer carries about as much freight as a mega-cap giant. It has been the sector's trading vehicle since 2006.

Stated mandate

VCR The fund passively tracks an index representing U.S. consumer discretionary stocks, seeking to approximate the index through full replication when possible and sampling when required.

XRT The fund seeks to provide investment results that generally correspond to the total return performance of the S&P Retail Select Industry Index, before fees and expenses.

Why people hold it

• VCR Costs 0.09% a year against a category median near 0.35%. In sector funds, where everyone owns roughly the same giants, that fee gap is the part you control.
• The index reaches past mega-caps into mid and small cap US consumer stocks, so homebuilders, specialty retailers and restaurant chains ride along too.vanguard.commsci.com
• Plain mechanics: full replication of its MSCI index where possible, sampling only where it isn't, with quarterly distributions. Same recipe since the 2004 launch.
• A multi-billion-dollar fund and one of the stronger builds in the consumer discretionary group, with tracking that stays close to the index it names.

• XRT Modified equal weight: the index resets constituents toward equal slices each quarter, so a single giant retailer does not run the whole fund.spglobal.com
• Retail only: apparel, automotive, broadline, computer and electronics, staples merchandise, drug, food and specialty stores. Car dealers count, carmakers do not.ssga.com
• Trading since 2006 and very actively traded, one of the older and busier ways to take a targeted position on US retail rather than a whole sector.ssga.com
• Sticks tightly to its index and stands among the stronger builds in its consumer discretionary peer group. Pays quarterly.

Worth knowing

• VCR Cap weighting rules the top: a few giants carry most of the basket despite about 300 names. Index rules cap any single issuer at 25%, which still leaves it top-heavy.msci.commsci.com 2
• One sector, and a cyclical one. These are the industries Vanguard describes as most sensitive to economic cycles, so the ride is bumpier than a total-market fund.vanguard.com
• XLY and FDIS come in a basis point lower at 0.08%. The cost race in this corner is now measured in rounding, not dollars.

• XRT At 0.35% it costs more than broad cap-weighted discretionary funds like XLY and FDIS near 0.08%. The focus and the equal weighting are what the extra buys.
• Equal weighting pulls small and mid-cap chains up next to the giants, so moves can be sharper than a cap-weighted sector fund's.ssga.com
• One industry, roughly 80 names. When shoppers tighten up, there is no other sector inside the fund to cushion it.

Full VCR profile⁠

Full XRT profile⁠