VOO vs XLU
Vanguard S&P 500 ETF vs State Street Utilities Select Sector SPDR ETF
Quick Verdict
VOO has a lower expense ratio. VOO delivered stronger 1-year returns. VOO offers more diversification with 505 holdings.
Side-by-Side Comparison
| Metric | VOO | XLU | Winner |
|---|---|---|---|
| Expense Ratio | 0.03% | 0.08% | |
| AUM | $979.0B | $23.5B | |
| Dividend Yield | 1.09% | 2.64% | |
| Holdings | 509 | 34 | |
| YTD Return | +13.44% | +2.40% | |
| 1Y Return | +22.62% | +4.40% | |
| 3Y Return (annualized) | +21.47% | +14.27% | |
| 5Y Return (annualized) | +13.27% | +8.29% | |
| Volatility (annualized) | 14.1% | 15.1% | |
| Max Drawdown | -34.3% | -55.7% | |
| Fund Family | Vanguard (US) | SPDR State Street Global Advisors | |
| Category | Equity | Equity | |
| Inception | Sep 7, 2010 | Dec 16, 1998 |
VOO vs XLU Performance
Vanguard S&P 500 ETF (VOO) is a ETF from Vanguard (US) and State Street Utilities Select Sector SPDR ETF (XLU) is a ETF from SPDR State Street Global Advisors. Over the past year VOO returned +22.62% while XLU returned +4.40%. Year to date, VOO is up 13.44% versus a gain of 2.40% for XLU.
Over three years, VOO compounded at +21.47% per year against +14.27% for XLU; over five years the annualized figures are +13.27% and +8.29% respectively. Across the full 16-year window we track, VOO has the edge at +13.55% annualized vs +4.59%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
XLU has been the more volatile fund, with annualized monthly volatility of 15.1% compared with 14.1% 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 -55.7% for XLU. 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 0.42. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
VOO charges 0.03% per year while XLU 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 2.64% for XLU.
Holdings Overlap
VOO and XLU share 31 holdings out of 506 unique holdings combined, representing a 2.2% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, VOO or XLU?
VOO has an expense ratio of 0.03% while XLU 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 XLU?
Over the past year VOO returned +22.62% vs +4.40% for XLU, so VOO leads on 1-year performance. Over the longest common window we track (16 years), VOO annualized +13.55% vs +4.59% for XLU. Past performance does not guarantee future results.
Which is riskier, VOO or XLU?
XLU has been the more volatile fund at 15.1% annualized versus 14.1% for VOO. Worst drawdown: VOO -34.3% vs XLU -55.7%.
Should I hold both VOO and XLU?
VOO and XLU have a monthly-return correlation of 0.42, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VOO and XLU?
VOO and XLU share 31 common holdings with a 2.2% weight overlap. Combined, they hold 506 unique securities.
Which pays a higher dividend, VOO or XLU?
VOO yields 1.09% while XLU yields 2.64%, so XLU currently pays the higher dividend yield.
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