$XLSR ETF Explained: Returns, Expense Ratio, Holdings, and Alternative ETFs
This is an actively managed ETF that executes tactical allocation across S&P 500 sectors. It aims to adjust sector weights in response to market conditions using a data-driven quantitative model.
SubscribeWhat is this ETF?
It employs a strategy that seeks excess returns by exploiting performance differences across sectors of the US large-cap equity market. It holds a mix of stocks and individual sector ETFs, concentrating investments in sectors positioned to benefit at each stage of the economic cycle.
It is suitable for investors who move beyond passive index tracking and expect to outperform the market through an active sector rotation strategy.
It is an actively managed ETF launched by State Street (SSGA) in 2019.
How does it invest?
| Item | Details |
|---|---|
| Benchmark Index | S&P 500 Index |
| Management Style | Active (Sector Rotation) |
| Investment Universe | US large-cap stocks and Select Sector SPDR ETFs |
| Rebalancing Frequency | As needed (based on model signals) |
| Total Expense Ratio | 0.70% |
The strategy is built on a quantitative model that comprehensively analyzes economic indicators, corporate earnings, and price momentum. When a particular sector is judged attractive, the strategy increases its weight; sectors expected to underperform are trimmed or excluded altogether.
- Leveraging State Street's sector management expertise
- Building a flexible portfolio using individual stocks and sector ETFs
Size and Cost
Assets Under Management (AUM) stand at $1.1B, with a total expense ratio of 0.70% annually.
Given its active management approach, the expense ratio tends to be higher than that of standard index funds, and investors should account for potential transaction costs stemming from frequent portfolio turnover.
Performance and Flows
1-Year Price Performance
Dividend & Yield
52-Week Price RangeDuring bull markets led by Technology and Communication Services, the fund has occasionally outpaced the index with notable resilience. In periods of rapid sector rotation, however, the model's forecasting errors have translated into heightened volatility.
Capital seeking professional tactical allocation flows in when the market's leading sector is unclear, and investor focus has recently centered on how the fund adjusts its weight in AI-related technology stocks.
Strengths and Weaknesses
It pursues excess returns through dynamic allocation aligned with market conditions, but active management risk and elevated costs can be a burden.
💪 Key Strengths
⚠️ Points of Caution
Alternative ETFs and Related Products
Unlike thematic products such as MAGS or ARKG that focus on a single theme, XLSR spans all 11 sectors within the S&P 500. Compared with SSUS, which employs a similar sector rotation strategy, performance varies according to each manager's proprietary model. Because the fund tracks market trends through weight changes in core sectors such as XLK (Information Technology) and XLV (Health Care), investors must choose between direct sector ETF exposure and a tactical allocation approach.
Peer Comparison ETFs| Ticker | Name | Price | Change | AUM | Total Expense Ratio | Dividend Yield | 1Y |
|---|---|---|---|---|---|---|---|
 MAGS | Roundhill Magnificent Seven ETF | $68.48 | -1.8% | $5.4B | 0.30% | 1.43% | +2.3% |
 GRNY | Fundstrat Granny Shots US Large Cap ETF | $26.58 | -3.3% | $4.4B | 0.75% | 0.13% | +2.9% |
 ARKG | ARK Genomic Revolution ETF | $51.40 | -6.7% | $2.4B | 0.75% | - | +72.5% |
 SSUS | Day Hagan Smart Sector ETF | $55.91 | -1.9% | $612.1M | 0.76% | 0.45% | +14.2% |
 INRO | iShares U.S. Industry Rotation Active ETF | $35.99 | -2.0% | $539.3M | 0.42% | 0.6% | +11.9% |
Top Holdings| Ticker | Name | Weight | Price | Change | Market Cap | P/E | Dividend Yield |
|---|---|---|---|---|---|---|---|
 MYMK | State Street My2031 Municipal Bond ETF | 0.92% | $24.67 | +0.1% | $0.0M | - | 2.61% |
 XLI | State Street Industrial Select Sector SPDR ETF | 0.33% | $167.40 | -1.6% | $0.0M | - | 1.13% |
 XLV | State Street Health Care Select Sector SPDR ETF | 0.17% | $184.87 | +0.5% | $0.0M | - | 1.38% |
| GOOG | Alphabet Inc | 0.08% | $278.22 | -1.4% | $3.41T | 14.5 | 0.31% |
 XLC | State Street Communication Services Select Sector SPDR ETF | 0.07% | $99.90 | -1.3% | $0.0M | - | 1.38% |
Investor Checklist
These are the key checkpoints to examine carefully when considering an investment in XLSR. It is essential to understand the active strategy's characteristics and cost structure, and to assess whether they align with your investment objectives.
| Checkpoint | What to Verify | Current Status |
|---|---|---|
| 📊 Sector Allocation Status | Assess the attractiveness of currently overweight sectors | Review required |
| 💵 Management Fee | Evaluate whether the higher cost versus index funds is justified | Substantial |
| 📈 Performance vs. Benchmark | Track whether excess returns over the S&P 500 are being achieved | Variable |
| Portfolio Turnover | Frequency of portfolio changes and the resulting cost impact | High |
The sector rotation strategy carries inherent active risk; if the calls miss the mark, returns can fall well short of broader market performance. In particular, during broad market downturns, sector shifts alone may not be sufficient to defend against losses.
In conclusion, XLSR can be a useful option for investors looking to tactically identify and position themselves in the market's leading sectors. However, it is advisable to weigh the cost structure and the characteristics of the management model carefully and to hold the fund as part of a broader, diversified portfolio.
SubscribeDisclaimer: This content is for informational purposes only and does not constitute investment advice. All investment responsibility lies with the investor.
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