VGK vs XLF
Vanguard FTSE Europe ETF vs State Street Financial Select Sector SPDR ETF
Quick Verdict
VGK has a lower expense ratio. VGK delivered stronger 1-year returns. VGK offers more diversification with 958 holdings.
Side-by-Side Comparison
| Metric | VGK | XLF | Winner |
|---|---|---|---|
| Expense Ratio | 0.06% | 0.08% | |
| AUM | $30.0B | $56.2B | |
| Dividend Yield | 2.94% | 1.51% | |
| Holdings | 1,251 | 80 | |
| YTD Return | +11.16% | +6.14% | |
| 1Y Return | +23.18% | +13.25% | |
| 3Y Return (annualized) | +18.17% | +20.31% | |
| 5Y Return (annualized) | +9.29% | +10.19% | |
| Volatility (annualized) | 18.5% | 21.4% | |
| Max Drawdown | -67.3% | -83.8% | |
| Fund Family | Vanguard (US) | SPDR State Street Global Advisors | |
| Category | Equity | Equity | |
| Inception | Mar 4, 2005 | Dec 16, 1998 |
VGK vs XLF Performance
Vanguard FTSE Europe ETF (VGK) 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 VGK returned +23.18% while XLF returned +13.25%. Year to date, VGK is up 11.16% versus a gain of 6.14% for XLF.
Over three years, VGK compounded at +18.17% per year against +20.31% for XLF; over five years the annualized figures are +9.29% and +10.19% respectively. Across the full 21-year window we track, XLF has the edge at +3.70% annualized vs +3.69%. 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 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 -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
VGK charges 0.06% per year while XLF 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 1.51% for XLF.
Holdings Overlap
VGK and XLF share 1 holdings out of 1034 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 VGK | Weight in XLF | Difference |
|---|---|---|---|
| HBAN | 0.13% | 0.46% | 0.33% |
Frequently Asked Questions
Which is cheaper, VGK or XLF?
VGK has an expense ratio of 0.06% while XLF 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 XLF?
Over the past year VGK returned +23.18% vs +13.25% for XLF, so VGK leads on 1-year performance. Over the longest common window we track (21 years), VGK annualized +3.69% vs +3.70% for XLF. Past performance does not guarantee future results.
Which is riskier, VGK or XLF?
XLF has been the more volatile fund at 21.4% annualized versus 18.5% for VGK. Worst drawdown: VGK -67.3% vs XLF -83.8%.
Should I hold both VGK and XLF?
VGK 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 VGK and XLF?
VGK and XLF share 1 common holdings with a 0.1% weight overlap. Combined, they hold 1034 unique securities.
Which pays a higher dividend, VGK or XLF?
VGK yields 2.94% while XLF yields 1.51%, so VGK currently pays the higher dividend yield.
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