VOO vs XLE
Vanguard S&P 500 ETF vs State Street Energy Select Sector SPDR ETF
Quick Verdict
VOO has a lower expense ratio. XLE delivered stronger 1-year returns. VOO offers more diversification with 509 holdings.
Side-by-Side Comparison
| Metric | VOO | XLE | Winner |
|---|---|---|---|
| Expense Ratio | 0.03% | 0.08% | |
| AUM | $979.0B | $38.1B | |
| Dividend Yield | 1.09% | 2.85% | |
| Holdings | 509 | 25 | |
| YTD Return | +14.48% | +35.60% | |
| 1Y Return | +22.02% | +47.04% | |
| 3Y Return (annualized) | +21.80% | +14.53% | |
| 5Y Return (annualized) | +13.36% | +24.28% | |
| Volatility (annualized) | 14.2% | 25.1% | |
| Max Drawdown | -34.3% | -76.7% | |
| Fund Family | Vanguard (US) | SPDR State Street Global Advisors | |
| Category | Equity | Equity | |
| Inception | Sep 7, 2010 | Dec 16, 1998 |
VOO vs XLE Performance
Vanguard S&P 500 ETF (VOO) 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 VOO returned +22.02% while XLE returned +47.04%. Year to date, VOO is up 14.48% versus a gain of 35.60% for XLE.
Over three years, VOO compounded at +21.80% per year against +14.53% for XLE; over five years the annualized figures are +13.36% and +24.28% respectively. Across the full 16-year window we track, VOO has the edge at +13.61% 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 14.2% for VOO. 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 -34.3% for VOO 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 0.59. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
VOO 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, VOO currently yields 1.09% against 2.85% for XLE.
Holdings Overlap
VOO and XLE share 21 holdings out of 506 unique holdings combined, representing a 3.0% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, VOO or XLE?
VOO has an expense ratio of 0.03% while XLE charges 0.08%. VOO is the cheaper option. On a $10,000 investment, that is $5 per year of difference.
Which performed better, VOO or XLE?
Over the past year VOO returned +22.02% vs +47.04% for XLE, so XLE leads on 1-year performance. Over the longest common window we track (16 years), VOO annualized +13.61% vs +6.96% for XLE. Past performance does not guarantee future results.
Which is riskier, VOO or XLE?
XLE has been the more volatile fund at 25.1% annualized versus 14.2% for VOO. Worst drawdown: VOO -34.3% vs XLE -76.7%.
Should I hold both VOO and XLE?
VOO and XLE have a monthly-return correlation of 0.59, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VOO and XLE?
VOO and XLE share 21 common holdings with a 3.0% weight overlap. Combined, they hold 506 unique securities.
Which pays a higher dividend, VOO or XLE?
VOO yields 1.09% while XLE yields 2.85%, so XLE currently pays the higher dividend yield.
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