VNQ vs XLE
Vanguard Real Estate ETF vs State Street Energy Select Sector SPDR ETF
Which is better, VNQ or XLE?
Mid Cap Blend against Large Cap Value.
XLE has a lower expense ratio. XLE led over 1Y, 3Y, 5Y and the full window. VNQ is less concentrated, with 54.1% of the fund in its ten largest positions against 73.4%.
MarketXLS is not an investment adviser. This comparison is generated automatically from market data and is for information only. A Best mark means the better reading on that one measure, not a recommendation to buy.
Side-by-Side Comparison
| Metric | VNQ | XLE |
|---|---|---|
| Expense Ratio | 0.13% | 0.08%Best |
| AUM | $39.3B | $42.4B |
| Dividend Yield | 3.49% | 2.55% |
| Holdings | 144 | 24 |
| YTD Return | +9.19% | +44.66%Best |
| 1Y Return | +5.61% | +50.72%Best |
| 3Y Return (annualized) | +9.40% | +15.55%Best |
| 5Y Return (annualized) | +1.41% | +26.06%Best |
| Volatility (annualized) | 21.4%Best | 26.2% |
| Max Drawdown | -75.8%Best | -76.7% |
| $10,000 over 5 years | $10,725 | $31,834Best |
| Top 10 Weight | 54.1%Best | 73.4% |
| Fund Family | Vanguard (US) | SPDR State Street Global Advisors |
| Category | Equity | Equity |
| Style | Mid Cap Blend | Large Cap Value |
| Inception | Sep 23, 2004 | Dec 16, 1998 |
Volatility and max drawdown are measured over the window both funds cover: Sep 29, 2004 to Sep 11, 2026 (21.9 years).
VNQ vs XLE growth
Month-end closes. Both lines start at 0% in the first month shown, so the gap between them is the difference in growth across that window. The full view covers the 21.9 years both funds cover.
VNQ vs XLE Performance
Vanguard Real Estate ETF (VNQ) is an ETF from Vanguard (US) and State Street Energy Select Sector SPDR ETF (XLE) is an ETF from SPDR State Street Global Advisors. Over the past year VNQ returned +5.61% while XLE returned +50.72%. Year to date, VNQ is up 9.19% versus a gain of 44.66% for XLE.
Over three years, VNQ compounded at +9.40% per year against +15.55% for XLE; over five years the annualized figures are +1.41% and +26.06% respectively. Across the full 22-year window we track, XLE has the edge at +7.20% annualized vs +3.94%.
Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
XLE has been the more volatile fund, with annualized monthly volatility of 26.2% compared with 21.4% for VNQ. 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 -75.8% for VNQ and -76.7% for XLE. Drawdown depth is what each fund did in the worst stretch of the window measured above.
The two funds' monthly returns correlate at 0.41. They move together some of the time, and apart the rest.
Fees and Cost Over Time
VNQ charges 0.13% per year while XLE charges 0.08%. On a $10,000 position that is $13 vs $8 annually, a gap of $5 per year that compounds over a long holding period. On income, VNQ currently yields 3.49% against 2.55% for XLE.
Holdings Overlap
We hold position weights for 144 holdings in VNQ and 22 in XLE, totalling 99.5% and 99.9% of the two funds. The two books name no position in common, so there is no overlap percentage to show.
0 positions in common, counted across the 144 positions we hold weights for in VNQ and 22 in XLE, against full books of 144 and 24.
What only one of them owns
Our book lists 21 positions for XLE that do not appear in our book for VNQ (98.2% of the fund), and 141 for VNQ that do not appear in XLE (97.3%).
Some of those will be the same company recorded under a different code in one of the two books, so the real difference in what you would own is no larger than this and may be smaller. We do not name the individual positions here for that reason.
You are not choosing between two funds in isolation.
Whichever of VNQ and XLE you pick has to sit alongside everything else you own. Add the rest and see what the combination actually holds.
Free for up to 10 holdings. No account needed.
Frequently Asked Questions
Which is cheaper, VNQ or XLE?
VNQ has an expense ratio of 0.13% while XLE charges 0.08%. XLE is the cheaper option, by $5 a year on a $10,000 investment.
Which performed better, VNQ or XLE?
Over the past year VNQ returned +5.61% vs +50.72% for XLE, so XLE leads on 1-year performance. Over the longest common window we track (22 years), VNQ annualized +3.94% vs +7.20% for XLE. Past performance does not guarantee future results. This is information, not a recommendation.
Which is riskier, VNQ or XLE?
XLE has been the more volatile fund at 26.2% annualized versus 21.4% for VNQ. Worst drawdown: VNQ -75.8% vs XLE -76.7%.
Should I hold both VNQ and XLE?
VNQ and XLE have a monthly-return correlation of 0.41, so their returns are far enough apart for the mix to behave differently from either one alone. This is information, not a recommendation.
Which pays a higher dividend, VNQ or XLE?
VNQ yields 3.49% while XLE yields 2.55%, so VNQ currently pays the higher dividend yield.
Is XLE better than VNQ?
XLE has a lower expense ratio. XLE led over 1Y, 3Y, 5Y and the full window. VNQ is less concentrated, with 54.1% of the fund in its ten largest positions against 73.4%. Which one suits a particular account depends on what it is for. This is information, not a recommendation.