XLY vs XLP Stock Comparison: AI Score, Valuation, Performance and Upside
XLY and XLP are the two consumer sector ETFs on opposite ends of the economic cycle spectrum. XLY (Consumer Discretionary) outperforms in economic expansions; XLP (Consumer Staples) outperforms in recessions and uncertain environments. Both belong in a portfolio context — XLY for growth and recovery; XLP for defensive stability. They behave as near-mirror images in terms of economic cycle sensitivity.
XLY vs XLP is economic cycle cyclicality for consumer growth in expansions (Consumer Discretionary) versus defensive stability for essential goods in all economic environments (Consumer Staples) — investors shift between XLY and XLP based on economic cycle positioning, making this the definitive consumer sector barbell trade.
XLP holds the edge across 3 of 5 key metrics in this comparison. XLP has delivered stronger 1-year price return (+6.94% vs -7.06% for XLY).
- prefer cyclical consumer sector exposure to capitalize on economic expansion and consumer spending growth
- value Amazon's dominant XLY weight as e-commerce, cloud, and advertising exposure within the consumer discretionary label
- want a high-beta consumer allocation that outperforms in bull markets and economic recoveries
- are comfortable with significant underperformance during recessions and consumer spending contractions
- prefer defensive consumer staples exposure with recession-resistant earnings from essential goods companies
- value consistent dividends from P&G, Coca-Cola, PepsiCo, and Walmart as reliable income regardless of economic conditions
- want portfolio ballast in uncertain or recessionary environments when consumer staples outperform by 20%+ vs discretionary
- are comfortable with lower total returns in bull markets as the cost of recession defense and income reliability
| Metric | XLY | XLP |
|---|---|---|
| ETF scorei | 40.0 | 48.0 |
| Latest closei | $111.39 | $83.49 |
| 1M returni | -4.27% | -2.44% |
| 6M returni | +1.95% | +3.14% |
| 1Y returni | -7.06% | +6.94% |
The ETF score weights long-term returns and risk-adjusted performance most heavily, but still rewards low expense ratios, larger fund size, and broader diversification — so it can favor low-cost, broad, mega-cap funds over smaller thematic or actively-managed funds even when the latter have delivered stronger returns.
How much would $10,000 be worth today if invested at the start of each period, with all dividends reinvested?
| Period | XLY | XLP |
|---|---|---|
| 1Y ago | $9.37K (-6.3%) started 2025-09-17 | $10.99K (+9.9%) started 2025-09-17 |
| 5Y ago | $13.15K (+31.5%) started 2021-09-17 | $15.36K (+53.6%) started 2021-09-17 |
| 10Y ago | $34.87K (+248.7%) started 2016-09-19 | $27.76K (+177.6%) started 2016-09-19 |
Hypothetical — past performance does not guarantee future results.
| Metric | XLY | XLP |
|---|---|---|
| Expense ratioi | 0.08% | 0.08% |
| Total assets (AUM)i | $22.75B | $14.52B |
| Dividend yieldi | 0.77% | 2.59% |
| Trailing P/Ei | 24.34 | 24.70 |
| Betai | 1.23 | 0.48 |
| 52-week change | -7.06% | 6.94% |
| Metric | XLY | XLP |
|---|---|---|
| 1Y returni | -7.06% | +6.94% |
| 6M returni | +1.95% | +3.14% |
| 1M returni | -4.27% | -2.44% |
| 1Y Sharpe ratio | -0.51 | 0.23 |
| Betai | 1.23 | 0.48 |
| Dividend yieldi | 0.77% | 2.59% |
| 5Y CAGR | +4.75% | +5.95% |
Over the past year, XLY and XLP have moved weakly in the same direction (correlation of 0.17), based on daily returns.
Lower drawdown and smaller single-period drops generally indicate a smoother ride, though they do not guarantee lower future risk.
| Period | Metric | XLY | XLP |
|---|---|---|---|
| 1Y | Growthi | -7.06% | +6.94% |
| CAGRi | -7.07% | +6.94% | |
| Volatilityi | 19.45% | 14.38% | |
| Sharpe ratioi | -0.51 | 0.23 | |
| Sortino ratioi | -0.70 | 0.33 | |
| Max drawdowni | 14.98% | 9.69% | |
| Current drawdowni | 10.19% | 6.07% | |
| Avg drawdowni | 4.98% | 3.86% | |
| Ulcer Indexi | 6.03% | 4.71% | |
| Max daily dropi | 4.61% | 2.43% | |
| Max wkly dropi | 7.31% | 4.70% | |
| 5Y | Growthi | +26.09% | +33.51% |
| CAGRi | +4.75% | +5.95% | |
| Volatilityi | 24.14% | 13.69% | |
| Sharpe ratioi | 0.13 | 0.16 | |
| Sortino ratioi | 0.18 | 0.23 | |
| Max drawdowni | 39.67% | 16.30% | |
| Current drawdowni | 10.19% | 6.07% | |
| Avg drawdowni | 14.20% | 4.57% | |
| Ulcer Indexi | 17.64% | 5.71% | |
| Max daily dropi | 6.54% | 6.43% | |
| Max wkly dropi | 14.23% | 8.12% | |
| 10Y | Growthi | +213.90% | +106.01% |
| CAGRi | +12.13% | +7.50% | |
| Volatilityi | 22.22% | 14.87% | |
| Sharpe ratioi | 0.43 | 0.26 | |
| Sortino ratioi | 0.59 | 0.36 | |
| Max drawdowni | 39.67% | 24.51% | |
| Current drawdowni | 10.19% | 6.07% | |
| Avg drawdowni | 8.77% | 4.19% | |
| Ulcer Indexi | 13.13% | 5.62% | |
| Max daily dropi | 12.67% | 9.40% | |
| Max wkly dropi | 18.40% | 15.90% |
| Category | XLY | XLP |
|---|---|---|
| Fund name | State Street Consumer Discretionary Select Sector SPDR ETF | State Street Consumer Staples Select Sector SPDR ETF |
| Type | ETF | ETF |
| Expense ratioi | 0.08% | 0.08% |
| Total assets (AUM)i | $22.75B | $14.52B |
| Dividend yieldi | 0.77% | 2.59% |
- Consumer discretionary outperforms significantly during economic expansions and strong consumer spending environments
- Amazon's dominant weight means XLY has significant e-commerce and cloud exposure beyond pure consumer retail
- Economic recovery plays — XLY rebounds sharply at cycle troughs as consumer confidence recovers
- Defensive recession protection — staples companies sell essential goods (food, beverages, household products) regardless of consumer confidence
- Dividend reliability — staples companies generate consistent free cash flow to support stable, growing dividend payments
- Inflation pricing power — branded consumer staples companies (P&G, Coca-Cola) can raise prices during inflation, maintaining real earnings
- Consumer discretionary is one of the worst-performing sectors in recessions and consumer spending contractions
- Tesla's weight (5–10% of XLY) adds significant EV-specific volatility not present in other consumer ETFs
- High expense sensitivity to economic cycles requires active management of XLY weighting through the business cycle
- XLP underperforms dramatically in economic expansions and bull markets when cyclical sectors lead
- Rising interest rates reduce staples stocks' relative appeal as income investments competing with bonds
- Mature businesses with limited growth — staples companies grow 2–4% annually, far below technology or discretionary growth rates
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