XLY vs XRT

XLYAState Street Consumer Discretionary Select Sector SPDR ETF

XRTBState Street SPDR S&P Retail ETF

In short

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.

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

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.

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

• 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.

• 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

• 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

• 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 XLY profile⁠

Full XRT profile⁠