VBR vs XLK
Vanguard Morningstar Small-Cap Value ETF vs State Street Technology Select Sector SPDR ETF
Quick Verdict
VBR has a lower expense ratio. XLK delivered stronger 1-year returns. VBR offers more diversification with 847 holdings.
Side-by-Side Comparison
| Metric | VBR | XLK | Winner |
|---|---|---|---|
| Expense Ratio | 0.05% | 0.08% | |
| AUM | $37.3B | $124.4B | |
| Dividend Yield | 1.76% | 0.45% | |
| Holdings | 847 | 77 | |
| YTD Return | +17.41% | +27.34% | |
| 1Y Return | +25.34% | +42.34% | |
| 3Y Return (annualized) | +17.49% | +30.61% | |
| 5Y Return (annualized) | +10.14% | +19.29% | |
| Volatility (annualized) | 19.0% | 23.2% | |
| Max Drawdown | -64.0% | -82.0% | |
| Fund Family | Vanguard (US) | SPDR State Street Global Advisors | |
| Category | Equity | Equity | |
| Inception | Jan 26, 2004 | Dec 16, 1998 |
VBR vs XLK Performance
Vanguard Morningstar Small-Cap Value ETF (VBR) is a ETF from Vanguard (US) and State Street Technology Select Sector SPDR ETF (XLK) is a ETF from SPDR State Street Global Advisors. Over the past year VBR returned +25.34% while XLK returned +42.34%. Year to date, VBR is up 17.41% versus a gain of 27.34% for XLK.
Over three years, VBR compounded at +17.49% per year against +30.61% for XLK; over five years the annualized figures are +10.14% and +19.29% respectively. Across the full 23-year window we track, XLK has the edge at +9.37% annualized vs +8.00%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
XLK has been the more volatile fund, with annualized monthly volatility of 23.2% 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 -82.0% for XLK. 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 0.70. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
VBR charges 0.05% per year while XLK 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 1.76% against 0.45% for XLK.
Holdings Overlap
VBR and XLK share 10 holdings out of 900 unique holdings combined, representing a 1.2% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, VBR or XLK?
VBR has an expense ratio of 0.05% while XLK 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 XLK?
Over the past year VBR returned +25.34% vs +42.34% for XLK, so XLK leads on 1-year performance. Over the longest common window we track (23 years), VBR annualized +8.00% vs +9.37% for XLK. Past performance does not guarantee future results.
Which is riskier, VBR or XLK?
XLK has been the more volatile fund at 23.2% annualized versus 19.0% for VBR. Worst drawdown: VBR -64.0% vs XLK -82.0%.
Should I hold both VBR and XLK?
VBR and XLK have a monthly-return correlation of 0.70, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VBR and XLK?
VBR and XLK share 10 common holdings with a 1.2% weight overlap. Combined, they hold 900 unique securities.
Which pays a higher dividend, VBR or XLK?
VBR yields 1.76% while XLK yields 0.45%, so VBR currently pays the higher dividend yield.
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