VEA vs XLK
Vanguard FTSE Developed Markets ETF vs State Street Technology Select Sector SPDR ETF
Quick Verdict
VEA has a lower expense ratio. XLK delivered stronger 1-year returns. VEA offers more diversification with 3,918 holdings.
Side-by-Side Comparison
| Metric | VEA | XLK | Winner |
|---|---|---|---|
| Expense Ratio | 0.03% | 0.08% | |
| AUM | $230.3B | $124.4B | |
| Dividend Yield | 2.55% | 0.45% | |
| Holdings | 3,918 | 77 | |
| YTD Return | +16.98% | +27.34% | |
| 1Y Return | +28.89% | +42.34% | |
| 3Y Return (annualized) | +21.77% | +30.61% | |
| 5Y Return (annualized) | +10.55% | +19.29% | |
| Volatility (annualized) | 17.8% | 23.2% | |
| Max Drawdown | -62.9% | -82.0% | |
| Fund Family | Vanguard (US) | SPDR State Street Global Advisors | |
| Category | Equity | Equity | |
| Inception | Jul 20, 2007 | Dec 16, 1998 |
VEA vs XLK Performance
Vanguard FTSE Developed Markets ETF (VEA) 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 VEA returned +28.89% while XLK returned +42.34%. Year to date, VEA is up 16.98% versus a gain of 27.34% for XLK.
Over three years, VEA compounded at +21.77% per year against +30.61% for XLK; over five years the annualized figures are +10.55% and +19.29% respectively. Across the full 19-year window we track, XLK has the edge at +9.37% annualized vs +3.17%. 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 17.8% for VEA. 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 -62.9% for VEA 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 0.74. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
VEA charges 0.03% per year while XLK 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, VEA currently yields 2.55% against 0.45% for XLK.
Holdings Overlap
VEA and XLK share 0 holdings out of 3819 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, VEA or XLK?
VEA has an expense ratio of 0.03% while XLK charges 0.08%. VEA is the cheaper option. On a $10,000 investment, that is $5 per year of difference.
Which performed better, VEA or XLK?
Over the past year VEA returned +28.89% vs +42.34% for XLK, so XLK leads on 1-year performance. Over the longest common window we track (19 years), VEA annualized +3.17% vs +9.37% for XLK. Past performance does not guarantee future results.
Which is riskier, VEA or XLK?
XLK has been the more volatile fund at 23.2% annualized versus 17.8% for VEA. Worst drawdown: VEA -62.9% vs XLK -82.0%.
Should I hold both VEA and XLK?
VEA and XLK have a monthly-return correlation of 0.74, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VEA and XLK?
VEA and XLK share 0 common holdings with a 0.0% weight overlap. Combined, they hold 3819 unique securities.
Which pays a higher dividend, VEA or XLK?
VEA yields 2.55% while XLK yields 0.45%, so VEA currently pays the higher dividend yield.
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