VTCIX vs XLV
Vanguard Tax-Managed Capital Appreciation Fund Institutional Shares vs State Street Health Care Select Sector SPDR ETF
Quick Verdict
VTCIX has a lower expense ratio. XLV delivered stronger 1-year returns. VTCIX offers more diversification with 836 holdings.
Side-by-Side Comparison
| Metric | VTCIX | XLV | Winner |
|---|---|---|---|
| Expense Ratio | 0.03% | 0.08% | |
| AUM | $5.2B | $43.9B | |
| Dividend Yield | 0.93% | 1.56% | |
| Holdings | 836 | 63 | |
| YTD Return | +12.08% | +13.25% | |
| 1Y Return | +20.64% | +29.65% | |
| 3Y Return (annualized) | +20.37% | +11.30% | |
| 5Y Return (annualized) | +11.00% | +6.83% | |
| Volatility (annualized) | 16.1% | 14.2% | |
| Max Drawdown | -26.0% | -40.6% | |
| Fund Family | Vanguard (US) | SPDR State Street Global Advisors | |
| Category | Equity | Equity | |
| Inception | Feb 24, 1999 | Dec 16, 1998 |
VTCIX vs XLV Performance
Vanguard Tax-Managed Capital Appreciation Fund Institutional Shares (VTCIX) is a mutual fund from Vanguard (US) and State Street Health Care Select Sector SPDR ETF (XLV) is a ETF from SPDR State Street Global Advisors. Over the past year VTCIX returned +20.64% while XLV returned +29.65%. Year to date, VTCIX is up 12.08% versus a gain of 13.25% for XLV.
Over three years, VTCIX compounded at +20.37% per year against +11.30% for XLV; over five years the annualized figures are +11.00% and +6.83% respectively. Across the full 5-year window we track, VTCIX has the edge at +11.00% annualized vs +7.62%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
VTCIX has been the more volatile fund, with annualized monthly volatility of 16.1% compared with 14.2% for XLV. 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 -26.0% for VTCIX and -40.6% for XLV. 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 0.57. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
VTCIX charges 0.03% per year while XLV 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, VTCIX currently yields 0.93% against 1.56% for XLV.
Holdings Overlap
VTCIX and XLV share 59 holdings out of 826 unique holdings combined, representing a 8.7% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, VTCIX or XLV?
VTCIX has an expense ratio of 0.03% while XLV charges 0.08%. VTCIX is the cheaper option. On a $10,000 investment, that is $5 per year of difference.
Which performed better, VTCIX or XLV?
Over the past year VTCIX returned +20.64% vs +29.65% for XLV, so XLV leads on 1-year performance. Over the longest common window we track (5 years), VTCIX annualized +11.00% vs +7.62% for XLV. Past performance does not guarantee future results.
Which is riskier, VTCIX or XLV?
VTCIX has been the more volatile fund at 16.1% annualized versus 14.2% for XLV. Worst drawdown: VTCIX -26.0% vs XLV -40.6%.
Should I hold both VTCIX and XLV?
VTCIX and XLV have a monthly-return correlation of 0.57, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VTCIX and XLV?
VTCIX and XLV share 59 common holdings with a 8.7% weight overlap. Combined, they hold 826 unique securities.
Which pays a higher dividend, VTCIX or XLV?
VTCIX yields 0.93% while XLV yields 1.56%, so XLV currently pays the higher dividend yield.
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