VGIT vs XLF
Vanguard Intermediate Term Treasury ETF vs State Street Financial Select Sector SPDR ETF
Quick Verdict
VGIT has a lower expense ratio. XLF delivered stronger 1-year returns. VGIT offers more diversification with 209 holdings.
Side-by-Side Comparison
| Metric | VGIT | XLF | Winner |
|---|---|---|---|
| Expense Ratio | 0.03% | 0.08% | |
| AUM | $42.4B | $58.6B | |
| Dividend Yield | 3.88% | 1.42% | |
| Holdings | 209 | 80 | |
| YTD Return | -0.22% | +6.28% | |
| 1Y Return | +1.22% | +9.29% | |
| 3Y Return (annualized) | +4.11% | +21.11% | |
| 5Y Return (annualized) | -0.07% | +10.11% | |
| Volatility (annualized) | 4.3% | 21.4% | |
| Max Drawdown | -17.2% | -83.8% | |
| Fund Family | Vanguard (US) | SPDR State Street Global Advisors | |
| Category | Fixed Income | Equity | |
| Inception | Nov 19, 2009 | Dec 16, 1998 |
VGIT vs XLF Performance
Vanguard Intermediate Term Treasury ETF (VGIT) 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 VGIT returned +1.22% while XLF returned +9.29%. Year to date, VGIT is down 0.22% versus a gain of 6.28% for XLF.
Over three years, VGIT compounded at +4.11% per year against +21.11% for XLF; over five years the annualized figures are -0.07% and +10.11% respectively. Across the full 17-year window we track, XLF has the edge at +3.70% annualized vs +0.78%. 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 4.3% for VGIT. 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 -17.2% for VGIT 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 -0.21. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
VGIT 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, VGIT currently yields 3.88% against 1.42% for XLF.
Holdings Overlap
VGIT and XLF share 0 holdings out of 161 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, VGIT or XLF?
VGIT has an expense ratio of 0.03% while XLF charges 0.08%. VGIT is the cheaper option. On a $10,000 investment, that is $5 per year of difference.
Which performed better, VGIT or XLF?
Over the past year VGIT returned +1.22% vs +9.29% for XLF, so XLF leads on 1-year performance. Over the longest common window we track (17 years), VGIT annualized +0.78% vs +3.70% for XLF. Past performance does not guarantee future results.
Which is riskier, VGIT or XLF?
XLF has been the more volatile fund at 21.4% annualized versus 4.3% for VGIT. Worst drawdown: VGIT -17.2% vs XLF -83.8%.
Should I hold both VGIT and XLF?
VGIT and XLF have a monthly-return correlation of -0.21, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VGIT and XLF?
VGIT and XLF share 0 common holdings with a 0.0% weight overlap. Combined, they hold 161 unique securities.
Which pays a higher dividend, VGIT or XLF?
VGIT yields 3.88% while XLF yields 1.42%, so VGIT currently pays the higher dividend yield.
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