VNQ vs XLF
Vanguard Real Estate ETF vs State Street Financial Select Sector SPDR ETF
Which is better, VNQ or XLF?
Mid Cap Blend against Large Cap Value.
XLF has a lower expense ratio. VNQ led over 1Y and the full window, XLF over 3Y and 5Y. VNQ is less concentrated, with 49.8% of the fund in its ten largest positions against 57.3%.
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 | XLF |
|---|---|---|
| Expense Ratio | 0.13% | 0.08%Best |
| AUM | $38.1B | $51.9B |
| Dividend Yield | 3.60% | 1.40% |
| Holdings | 144 | 160 |
| YTD Return | +3.58%Best | -0.71% |
| 1Y Return | +2.17%Best | +1.92% |
| 3Y Return (annualized) | +10.51% | +19.56%Best |
| 5Y Return (annualized) | +1.10% | +8.77%Best |
| Volatility (annualized) | 21.4%Best | 21.8% |
| Max Drawdown | -75.8%Best | -83.8% |
| $10,000 over 5 years | $10,562 | $15,225Best |
| Top 10 Weight | 49.8%Best | 57.3% |
| 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 Oct 5, 2026 (22 years).
VNQ vs XLF 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 22 years both funds cover.
VNQ vs XLF Performance
Vanguard Real Estate ETF (VNQ) is an ETF from Vanguard (US) and State Street Financial Select Sector SPDR ETF (XLF) is an ETF from SPDR State Street Global Advisors. Over the past year VNQ returned +2.17% while XLF returned +1.92%. Year to date, VNQ is up 3.58% versus a loss of 0.71% for XLF.
Over three years, VNQ compounded at +10.51% per year against +19.56% for XLF; over five years the annualized figures are +1.10% and +8.77% respectively. Across the full 22-year window we track, VNQ has the edge at +3.68% annualized vs +3.39%.
Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
XLF has been the more volatile fund, with annualized monthly volatility of 21.8% 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 -83.8% for XLF. Drawdown depth is what each fund did in the worst stretch of the window measured above.
The two funds' monthly returns correlate at 0.70. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
VNQ charges 0.13% per year while XLF 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 3.60% against 1.40% for XLF.
Holdings Overlap
We hold position weights for 139 holdings in VNQ and 77 in XLF, totalling 99.4% and 99.8% 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 139 positions we hold weights for in VNQ and 77 in XLF, against full books of 144 and 160.
What only one of them owns
Measured across the 139 and 77 positions we hold weights for.
XLF holds 76 positions VNQ does not, 99.5% of the fund.
Largest: JPM 11.82%, BRK.B 11.59%, V 7.62%, MA 5.69%, BAC 5.07%
You are not choosing between two funds in isolation.
Whichever of VNQ and XLF 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 XLF?
VNQ has an expense ratio of 0.13% while XLF charges 0.08%. XLF is the cheaper option, by $5 a year on a $10,000 investment.
Which performed better, VNQ or XLF?
Over the past year VNQ returned +2.17% vs +1.92% for XLF, so VNQ leads on 1-year performance. Over the longest common window we track (22 years), VNQ annualized +3.68% vs +3.39% for XLF. Past performance does not guarantee future results. This is information, not a recommendation.
Which is riskier, VNQ or XLF?
XLF has been the more volatile fund at 21.8% annualized versus 21.4% for VNQ. Worst drawdown: VNQ -75.8% vs XLF -83.8%.
Should I hold both VNQ and XLF?
VNQ and XLF have a monthly-return correlation of 0.70, 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 XLF?
VNQ yields 3.60% while XLF yields 1.40%, so VNQ currently pays the higher dividend yield.
Is XLF better than VNQ?
XLF has a lower expense ratio. VNQ led over 1Y and the full window, XLF over 3Y and 5Y. VNQ is less concentrated, with 49.8% of the fund in its ten largest positions against 57.3%. Which one suits a particular account depends on what it is for. This is information, not a recommendation.