VGSH vs XLE
Vanguard Short Term Treasury ETF vs State Street Energy Select Sector SPDR ETF
Quick Verdict
VGSH has a lower expense ratio. XLE delivered stronger 1-year returns. VGSH offers more diversification with 94 holdings.
Side-by-Side Comparison
| Metric | VGSH | XLE | Winner |
|---|---|---|---|
| Expense Ratio | 0.03% | 0.08% | |
| AUM | $34.7B | $40.0B | |
| Dividend Yield | 3.85% | 2.55% | |
| Holdings | 94 | 24 | |
| YTD Return | +1.13% | +41.58% | |
| 1Y Return | +2.90% | +53.25% | |
| 3Y Return (annualized) | +4.38% | +16.74% | |
| 5Y Return (annualized) | +1.96% | +27.23% | |
| Volatility (annualized) | 1.4% | 25.1% | |
| Max Drawdown | -6.7% | -76.7% | |
| Fund Family | Vanguard (US) | SPDR State Street Global Advisors | |
| Category | Fixed Income | Equity | |
| Inception | Nov 19, 2009 | Dec 16, 1998 |
VGSH vs XLE Performance
Vanguard Short Term Treasury ETF (VGSH) 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 VGSH returned +2.90% while XLE returned +53.25%. Year to date, VGSH is up 1.13% versus a gain of 41.58% for XLE.
Over three years, VGSH compounded at +4.38% per year against +16.74% for XLE; over five years the annualized figures are +1.96% and +27.23% respectively. Across the full 17-year window we track, XLE has the edge at +7.12% annualized vs +0.73%. 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 1.4% for VGSH. 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 -6.7% for VGSH 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 -0.18. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
VGSH charges 0.03% per year while XLE 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, VGSH currently yields 3.85% against 2.55% for XLE.
Holdings Overlap
VGSH and XLE share 0 holdings out of 38 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, VGSH or XLE?
VGSH has an expense ratio of 0.03% while XLE charges 0.08%. VGSH is the cheaper option. On a $10,000 investment, that is $5 per year of difference.
Which performed better, VGSH or XLE?
Over the past year VGSH returned +2.90% vs +53.25% for XLE, so XLE leads on 1-year performance. Over the longest common window we track (17 years), VGSH annualized +0.73% vs +7.12% for XLE. Past performance does not guarantee future results.
Which is riskier, VGSH or XLE?
XLE has been the more volatile fund at 25.1% annualized versus 1.4% for VGSH. Worst drawdown: VGSH -6.7% vs XLE -76.7%.
Should I hold both VGSH and XLE?
VGSH and XLE have a monthly-return correlation of -0.18, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VGSH and XLE?
VGSH and XLE share 0 common holdings with a 0.0% weight overlap. Combined, they hold 38 unique securities.
Which pays a higher dividend, VGSH or XLE?
VGSH yields 3.85% while XLE yields 2.55%, so VGSH currently pays the higher dividend yield.
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