VEU vs XLF
Vanguard FTSE All World Ex US ETF vs State Street Financial Select Sector SPDR ETF
Quick Verdict
VEU has a lower expense ratio. VEU delivered stronger 1-year returns. VEU offers more diversification with 3,928 holdings.
Side-by-Side Comparison
| Metric | VEU | XLF | Winner |
|---|---|---|---|
| Expense Ratio | 0.04% | 0.08% | |
| AUM | $68.4B | $58.6B | |
| Dividend Yield | 2.55% | 1.42% | |
| Holdings | 3,928 | 80 | |
| YTD Return | +14.50% | +4.58% | |
| 1Y Return | +25.77% | +9.39% | |
| 3Y Return (annualized) | +20.75% | +20.74% | |
| 5Y Return (annualized) | +9.98% | +10.51% | |
| Volatility (annualized) | 17.7% | 21.4% | |
| Max Drawdown | -62.8% | -83.8% | |
| Fund Family | Vanguard (US) | SPDR State Street Global Advisors | |
| Category | Equity | Equity | |
| Inception | Mar 2, 2007 | Dec 16, 1998 |
VEU vs XLF Performance
Vanguard FTSE All World Ex US ETF (VEU) 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 VEU returned +25.77% while XLF returned +9.39%. Year to date, VEU is up 14.50% versus a gain of 4.58% for XLF.
Over three years, VEU compounded at +20.75% per year against +20.74% for XLF; over five years the annualized figures are +9.98% and +10.51% respectively. Across the full 20-year window we track, XLF has the edge at +3.64% annualized vs +3.55%. 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 17.7% for VEU. 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 -62.8% for VEU 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 0.74. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
VEU charges 0.04% per year while XLF charges 0.08%. On a $10,000 position that is $4 vs $8 annually, a gap of $4 per year that compounds over a long holding period. On income, VEU currently yields 2.55% against 1.42% for XLF.
Holdings Overlap
VEU and XLF share 1 holdings out of 2897 unique holdings combined, representing a 0.1% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Top Shared Holdings
| Stock | Weight in VEU | Weight in XLF | Difference |
|---|---|---|---|
| HBAN | 0.05% | 0.46% | 0.41% |
Frequently Asked Questions
Which is cheaper, VEU or XLF?
VEU has an expense ratio of 0.04% while XLF charges 0.08%. VEU is the cheaper option. On a $10,000 investment, that is $4 per year of difference.
Which performed better, VEU or XLF?
Over the past year VEU returned +25.77% vs +9.39% for XLF, so VEU leads on 1-year performance. Over the longest common window we track (20 years), VEU annualized +3.55% vs +3.64% for XLF. Past performance does not guarantee future results.
Which is riskier, VEU or XLF?
XLF has been the more volatile fund at 21.4% annualized versus 17.7% for VEU. Worst drawdown: VEU -62.8% vs XLF -83.8%.
Should I hold both VEU and XLF?
VEU and XLF 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 VEU and XLF?
VEU and XLF share 1 common holdings with a 0.1% weight overlap. Combined, they hold 2897 unique securities.
Which pays a higher dividend, VEU or XLF?
VEU yields 2.55% while XLF yields 1.42%, so VEU currently pays the higher dividend yield.
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