VCSH vs XLF
Vanguard Short Term Corporate Bond ETF vs State Street Financial Select Sector SPDR ETF
Quick Verdict
VCSH has a lower expense ratio. XLF delivered stronger 1-year returns. VCSH offers more diversification with 2440 holdings.
Side-by-Side Comparison
| Metric | VCSH | XLF | Winner |
|---|---|---|---|
| Expense Ratio | 0.03% | 0.08% | |
| AUM | $44.9B | $56.2B | |
| Dividend Yield | 4.44% | 1.51% | |
| Holdings | 2,719 | 80 | |
| YTD Return | +0.86% | +6.98% | |
| 1Y Return | +2.85% | +12.14% | |
| 3Y Return (annualized) | +5.57% | +20.59% | |
| 5Y Return (annualized) | +2.33% | +10.49% | |
| Volatility (annualized) | 2.6% | 21.4% | |
| Max Drawdown | -12.9% | -83.8% | |
| Fund Family | Vanguard (US) | SPDR State Street Global Advisors | |
| Category | Fixed Income | Equity | |
| Inception | Nov 19, 2009 | Dec 16, 1998 |
VCSH vs XLF Performance
Vanguard Short Term Corporate Bond ETF (VCSH) 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 VCSH returned +2.85% while XLF returned +12.14%. Year to date, VCSH is up 0.86% versus a gain of 6.98% for XLF.
Over three years, VCSH compounded at +5.57% per year against +20.59% for XLF; over five years the annualized figures are +2.33% and +10.49% respectively. Across the full 17-year window we track, XLF has the edge at +3.73% annualized vs +1.29%. 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 2.6% for VCSH. 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 -12.9% for VCSH 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 0.35. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
VCSH charges 0.03% per year while XLF charges 0.08%. On a $10,000 position that is $3 vs $8 annually, a gap of $5 per year that compounds over a long holding period. On income, VCSH currently yields 4.44% against 1.51% for XLF.
Holdings Overlap
VCSH and XLF share 0 holdings out of 2517 unique holdings combined, representing a 0.0% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, VCSH or XLF?
VCSH has an expense ratio of 0.03% while XLF charges 0.08%. VCSH is the cheaper option. On a $10,000 investment, that is $5 per year of difference.
Which performed better, VCSH or XLF?
Over the past year VCSH returned +2.85% vs +12.14% for XLF, so XLF leads on 1-year performance. Over the longest common window we track (17 years), VCSH annualized +1.29% vs +3.73% for XLF. Past performance does not guarantee future results.
Which is riskier, VCSH or XLF?
XLF has been the more volatile fund at 21.4% annualized versus 2.6% for VCSH. Worst drawdown: VCSH -12.9% vs XLF -83.8%.
Should I hold both VCSH and XLF?
VCSH and XLF have a monthly-return correlation of 0.35, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VCSH and XLF?
VCSH and XLF share 0 common holdings with a 0.0% weight overlap. Combined, they hold 2517 unique securities.
Which pays a higher dividend, VCSH or XLF?
VCSH yields 4.44% while XLF yields 1.51%, so VCSH currently pays the higher dividend yield.
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