VBR vs XLF
Vanguard Small Cap Value ETF vs State Street Financial Select Sector SPDR ETF
Quick Verdict
VBR has a lower expense ratio. VBR delivered stronger 1-year returns. VBR offers more diversification with 809 holdings.
Side-by-Side Comparison
| Metric | VBR | XLF | Winner |
|---|---|---|---|
| Expense Ratio | 0.05% | 0.08% | |
| AUM | $36.9B | $56.2B | |
| Dividend Yield | 2.23% | 1.51% | |
| Holdings | 853 | 80 | |
| YTD Return | +17.81% | +6.36% | |
| 1Y Return | +25.90% | +12.12% | |
| 3Y Return (annualized) | +16.12% | +20.37% | |
| 5Y Return (annualized) | +9.72% | +10.20% | |
| Volatility (annualized) | 19.0% | 21.4% | |
| Max Drawdown | -64.0% | -83.8% | |
| Fund Family | Vanguard (US) | SPDR State Street Global Advisors | |
| Category | Equity | Equity | |
| Inception | Jan 26, 2004 | Dec 16, 1998 |
VBR vs XLF Performance
Vanguard Small Cap Value ETF (VBR) is a ETF from Vanguard (US) and State Street Financial Select Sector SPDR ETF (XLF) is a ETF from SPDR State Street Global Advisors. Over the past year VBR returned +25.90% while XLF returned +12.12%. Year to date, VBR is up 17.81% versus a gain of 6.36% for XLF.
Over three years, VBR compounded at +16.12% per year against +20.37% for XLF; over five years the annualized figures are +9.72% and +10.20% respectively. Across the full 23-year window we track, VBR has the edge at +8.02% annualized vs +3.70%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
XLF has been the more volatile fund, with annualized monthly volatility of 21.4% compared with 19.0% for VBR. Lower volatility generally means a smoother ride, though it often comes with lower long-run returns.
The deepest peak-to-trough decline in our data was -64.0% for VBR and -83.8% for XLF. Drawdown depth is worth weighing if you expect to sell during market stress rather than ride it out.
The two funds' monthly returns correlate at 0.85. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
VBR charges 0.05% per year while XLF charges 0.08%. On a $10,000 position that is $5 vs $8 annually, a gap of $3 per year that compounds over a long holding period. On income, VBR currently yields 2.23% against 1.51% for XLF.
Holdings Overlap
VBR and XLF share 5 holdings out of 881 unique holdings combined, representing a 0.8% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, VBR or XLF?
VBR has an expense ratio of 0.05% while XLF charges 0.08%. VBR is the cheaper option. On a $10,000 investment, that is $3 per year of difference.
Which performed better, VBR or XLF?
Over the past year VBR returned +25.90% vs +12.12% for XLF, so VBR leads on 1-year performance. Over the longest common window we track (23 years), VBR annualized +8.02% vs +3.70% for XLF. Past performance does not guarantee future results.
Which is riskier, VBR or XLF?
XLF has been the more volatile fund at 21.4% annualized versus 19.0% for VBR. Worst drawdown: VBR -64.0% vs XLF -83.8%.
Should I hold both VBR and XLF?
VBR and XLF have a monthly-return correlation of 0.85, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VBR and XLF?
VBR and XLF share 5 common holdings with a 0.8% weight overlap. Combined, they hold 881 unique securities.
Which pays a higher dividend, VBR or XLF?
VBR yields 2.23% while XLF yields 1.51%, so VBR currently pays the higher dividend yield.
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