VGK vs XLE
Vanguard FTSE Europe ETF vs State Street Energy Select Sector SPDR ETF
Quick Verdict
VGK has a lower expense ratio. XLE delivered stronger 1-year returns. VGK offers more diversification with 958 holdings.
Side-by-Side Comparison
| Metric | VGK | XLE | Winner |
|---|---|---|---|
| Expense Ratio | 0.06% | 0.08% | |
| AUM | $30.0B | $38.1B | |
| Dividend Yield | 2.94% | 2.85% | |
| Holdings | 1,251 | 25 | |
| YTD Return | +11.10% | +35.54% | |
| 1Y Return | +21.87% | +48.67% | |
| 3Y Return (annualized) | +18.13% | +14.52% | |
| 5Y Return (annualized) | +9.29% | +23.97% | |
| Volatility (annualized) | 18.5% | 25.1% | |
| Max Drawdown | -67.3% | -76.7% | |
| Fund Family | Vanguard (US) | SPDR State Street Global Advisors | |
| Category | Equity | Equity | |
| Inception | Mar 4, 2005 | Dec 16, 1998 |
VGK vs XLE Performance
Vanguard FTSE Europe ETF (VGK) is a ETF from Vanguard (US) and State Street Energy Select Sector SPDR ETF (XLE) is a ETF from SPDR State Street Global Advisors. Over the past year VGK returned +21.87% while XLE returned +48.67%. Year to date, VGK is up 11.10% versus a gain of 35.54% for XLE.
Over three years, VGK compounded at +18.13% per year against +14.52% for XLE; over five years the annualized figures are +9.29% and +23.97% respectively. Across the full 21-year window we track, XLE has the edge at +6.96% annualized vs +3.69%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
XLE has been the more volatile fund, with annualized monthly volatility of 25.1% compared with 18.5% for VGK. 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 -67.3% for VGK and -76.7% for XLE. 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 0.60. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
VGK charges 0.06% per year while XLE charges 0.08%. On a $10,000 position that is $6 vs $8 annually, a gap of $2 per year that compounds over a long holding period. On income, VGK currently yields 2.94% against 2.85% for XLE.
Holdings Overlap
VGK and XLE share 1 holdings out of 979 unique holdings combined, representing a 0.5% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Top Shared Holdings
| Stock | Weight in VGK | Weight in XLE | Difference |
|---|---|---|---|
| SLB:CW | 0.50% | 4.46% | 3.96% |
Frequently Asked Questions
Which is cheaper, VGK or XLE?
VGK has an expense ratio of 0.06% while XLE charges 0.08%. VGK is the cheaper option. On a $10,000 investment, that is $2 per year of difference.
Which performed better, VGK or XLE?
Over the past year VGK returned +21.87% vs +48.67% for XLE, so XLE leads on 1-year performance. Over the longest common window we track (21 years), VGK annualized +3.69% vs +6.96% for XLE. Past performance does not guarantee future results.
Which is riskier, VGK or XLE?
XLE has been the more volatile fund at 25.1% annualized versus 18.5% for VGK. Worst drawdown: VGK -67.3% vs XLE -76.7%.
Should I hold both VGK and XLE?
VGK and XLE have a monthly-return correlation of 0.60, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VGK and XLE?
VGK and XLE share 1 common holdings with a 0.5% weight overlap. Combined, they hold 979 unique securities.
Which pays a higher dividend, VGK or XLE?
VGK yields 2.94% while XLE yields 2.85%, so VGK currently pays the higher dividend yield.
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