VIG vs XLE
Vanguard Dividend Appreciation ETF vs State Street Energy Select Sector SPDR ETF
Quick Verdict
VIG has a lower expense ratio. XLE delivered stronger 1-year returns. VIG offers more diversification with 335 holdings.
Side-by-Side Comparison
| Metric | VIG | XLE | Winner |
|---|---|---|---|
| Expense Ratio | 0.04% | 0.08% | |
| AUM | $110.2B | $38.1B | |
| Dividend Yield | 1.79% | 2.85% | |
| Holdings | 335 | 25 | |
| YTD Return | +12.71% | +35.60% | |
| 1Y Return | +19.37% | +47.04% | |
| 3Y Return (annualized) | +16.71% | +14.53% | |
| 5Y Return (annualized) | +10.78% | +24.28% | |
| Volatility (annualized) | 13.3% | 25.1% | |
| Max Drawdown | -48.2% | -76.7% | |
| Fund Family | Vanguard (US) | SPDR State Street Global Advisors | |
| Category | Equity | Equity | |
| Inception | Apr 21, 2006 | Dec 16, 1998 |
VIG vs XLE Performance
Vanguard Dividend Appreciation ETF (VIG) 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 VIG returned +19.37% while XLE returned +47.04%. Year to date, VIG is up 12.71% versus a gain of 35.60% for XLE.
Over three years, VIG compounded at +16.71% per year against +14.53% for XLE; over five years the annualized figures are +10.78% and +24.28% respectively. Across the full 20-year window we track, VIG has the edge at +8.71% annualized vs +6.96%. 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 13.3% for VIG. 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 -48.2% for VIG 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
VIG charges 0.04% per year while XLE 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, VIG currently yields 1.79% against 2.85% for XLE.
Holdings Overlap
VIG and XLE share 3 holdings out of 350 unique holdings combined, representing a 2.9% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, VIG or XLE?
VIG has an expense ratio of 0.04% while XLE charges 0.08%. VIG is the cheaper option. On a $10,000 investment, that is $4 per year of difference.
Which performed better, VIG or XLE?
Over the past year VIG returned +19.37% vs +47.04% for XLE, so XLE leads on 1-year performance. Over the longest common window we track (20 years), VIG annualized +8.71% vs +6.96% for XLE. Past performance does not guarantee future results.
Which is riskier, VIG or XLE?
XLE has been the more volatile fund at 25.1% annualized versus 13.3% for VIG. Worst drawdown: VIG -48.2% vs XLE -76.7%.
Should I hold both VIG and XLE?
VIG 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 VIG and XLE?
VIG and XLE share 3 common holdings with a 2.9% weight overlap. Combined, they hold 350 unique securities.
Which pays a higher dividend, VIG or XLE?
VIG yields 1.79% while XLE yields 2.85%, so XLE currently pays the higher dividend yield.
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