Designed to provide broad exposure to the Consumer Discretionary - Broad segment of the equity market, the State Street Consumer Discretionary Select Sector SPDR ETF (XLY Quick QuoteXLY - Free Report) is a passively managed exchange traded fund launched on December 16, 1998.

Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.

Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Consumer Discretionary - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 10, placing it in bottom 38%.

Index Details

The fund is sponsored by State Street Investment Management. It has amassed assets over $22.74 billion, making it the largest ETF attempting to match the performance of the Consumer Discretionary - Broad segment of the equity market. XLY seeks to match the performance of the Consumer Discretionary Select Sector Index before fees and expenses.

The Consumer Discretionary Select Sector Index seeks to provide an effective representation of the consumer discretionary sector of the S&P 500 Index.

Costs

When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.

Annual operating expenses for this ETF are 0.08%, making it one of the least expensive products in the space.

It has a 12-month trailing dividend yield of 0.75%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation in the Consumer Discretionary sector -- about 100% of the portfolio.

Looking at individual holdings, Amazon.com Inc (AMZN) accounts for about 24.6% of total assets, followed by Tesla Inc (TSLA) and Home Depot Inc (HD).

The top 10 holdings account for about 70% of total assets under management.

Performance and Risk

So far this year, XLY has lost about 0.52%, and was up about 12.84% in the last one year (as of 06/16/2026). During this past 52-week period, the fund has traded between $105.165 and $124.52.

The ETF has a beta of 1.21 and standard deviation of 20.46% for the trailing three-year period, making it a medium risk choice in the space. With about 52 holdings, it effectively diversifies company-specific risk.

Alternatives

State Street Consumer Discretionary Select Sector SPDR ETF sports a Zacks ETF Rank of 4 (Sell), which is based on expected asset class return, expense ratio, and momentum, among other factors. XLY, then, is not a suitable option for investors seeking exposure to the Consumer Discretionary ETFs segment of the market. However, there are better ETFs in the space to consider.

iShares U.S. Home Construction ETF (ITB) tracks Dow Jones U.S. Select Home Construction Index and the Vanguard Consumer Discretionary Index Fund ETF Shares (VCR) tracks MSCI US Investable Market Consumer Discretionary 25/50 Index. iShares U.S. Home Construction ETF has $2.72 billion in assets, Vanguard Consumer Discretionary Index Fund ETF Shares has $6.23 billion. ITB has an expense ratio of 0.38%, and VCR charges 0.09%.

Bottom Line

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