VIG vs XLF
Vanguard Dividend Appreciation ETF vs State Street Financial Select Sector SPDR ETF
Quick Verdict
VIG has a lower expense ratio. VIG delivered stronger 1-year returns. VIG offers more diversification with 331 holdings.
Side-by-Side Comparison
| Metric | VIG | XLF | Winner |
|---|---|---|---|
| Expense Ratio | 0.04% | 0.08% | |
| AUM | $110.2B | $56.2B | |
| Dividend Yield | 1.79% | 1.51% | |
| Holdings | 335 | 80 | |
| YTD Return | +12.26% | +6.14% | |
| 1Y Return | +20.77% | +13.25% | |
| 3Y Return (annualized) | +16.59% | +20.31% | |
| 5Y Return (annualized) | +10.76% | +10.19% | |
| Volatility (annualized) | 13.3% | 21.4% | |
| Max Drawdown | -48.2% | -83.8% | |
| Fund Family | Vanguard (US) | SPDR State Street Global Advisors | |
| Category | Equity | Equity | |
| Inception | Apr 21, 2006 | Dec 16, 1998 |
VIG vs XLF Performance
Vanguard Dividend Appreciation ETF (VIG) 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 VIG returned +20.77% while XLF returned +13.25%. Year to date, VIG is up 12.26% versus a gain of 6.14% for XLF.
Over three years, VIG compounded at +16.59% per year against +20.31% for XLF; over five years the annualized figures are +10.76% and +10.19% respectively. Across the full 20-year window we track, VIG has the edge at +8.69% annualized vs +3.70%. 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 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 -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 0.81. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
VIG charges 0.04% per year while XLF 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 1.51% for XLF.
Holdings Overlap
VIG and XLF share 36 holdings out of 372 unique holdings combined, representing a 18.3% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, VIG or XLF?
VIG has an expense ratio of 0.04% while XLF 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 XLF?
Over the past year VIG returned +20.77% vs +13.25% for XLF, so VIG leads on 1-year performance. Over the longest common window we track (20 years), VIG annualized +8.69% vs +3.70% for XLF. Past performance does not guarantee future results.
Which is riskier, VIG or XLF?
XLF has been the more volatile fund at 21.4% annualized versus 13.3% for VIG. Worst drawdown: VIG -48.2% vs XLF -83.8%.
Should I hold both VIG and XLF?
VIG and XLF have a monthly-return correlation of 0.81, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VIG and XLF?
VIG and XLF share 36 common holdings with a 18.3% weight overlap. Combined, they hold 372 unique securities.
Which pays a higher dividend, VIG or XLF?
VIG yields 1.79% while XLF yields 1.51%, so VIG currently pays the higher dividend yield.
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