VTEB vs XLV
Vanguard Tax-Exempt Bond ETF vs State Street Health Care Select Sector SPDR ETF
Quick Verdict
VTEB has a lower expense ratio. XLV delivered stronger 1-year returns. VTEB offers more diversification with 9,952 holdings.
Side-by-Side Comparison
| Metric | VTEB | XLV | Winner |
|---|---|---|---|
| Expense Ratio | 0.03% | 0.08% | |
| AUM | $46.0B | $42.1B | |
| Dividend Yield | 3.34% | 1.60% | |
| Holdings | 9,952 | 62 | |
| YTD Return | +0.78% | +9.20% | |
| 1Y Return | +5.17% | +28.53% | |
| 3Y Return (annualized) | +3.19% | +9.18% | |
| 5Y Return (annualized) | +0.66% | +6.43% | |
| Volatility (annualized) | 4.9% | 14.2% | |
| Max Drawdown | -17.0% | -40.6% | |
| Fund Family | Vanguard (US) | SPDR State Street Global Advisors | |
| Category | Tax Preferred | Equity | |
| Inception | Aug 21, 2015 | Dec 16, 1998 |
VTEB vs XLV Performance
Vanguard Tax-Exempt Bond ETF (VTEB) is a ETF 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 VTEB returned +5.17% while XLV returned +28.53%. Year to date, VTEB is up 0.78% versus a gain of 9.20% for XLV.
Over three years, VTEB compounded at +3.19% per year against +9.18% for XLV; over five years the annualized figures are +0.66% and +6.43% respectively. Across the full 11-year window we track, XLV has the edge at +7.48% annualized vs +1.28%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
XLV has been the more volatile fund, with annualized monthly volatility of 14.2% compared with 4.9% for VTEB. 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 -17.0% for VTEB 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 0.30. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
VTEB 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, VTEB currently yields 3.34% against 1.60% for XLV.
Holdings Overlap
VTEB and XLV share 0 holdings out of 3593 unique holdings combined, representing a 0.0% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, VTEB or XLV?
VTEB has an expense ratio of 0.03% while XLV charges 0.08%. VTEB is the cheaper option. On a $10,000 investment, that is $5 per year of difference.
Which performed better, VTEB or XLV?
Over the past year VTEB returned +5.17% vs +28.53% for XLV, so XLV leads on 1-year performance. Over the longest common window we track (11 years), VTEB annualized +1.28% vs +7.48% for XLV. Past performance does not guarantee future results.
Which is riskier, VTEB or XLV?
XLV has been the more volatile fund at 14.2% annualized versus 4.9% for VTEB. Worst drawdown: VTEB -17.0% vs XLV -40.6%.
Should I hold both VTEB and XLV?
VTEB and XLV have a monthly-return correlation of 0.30, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VTEB and XLV?
VTEB and XLV share 0 common holdings with a 0.0% weight overlap. Combined, they hold 3593 unique securities.
Which pays a higher dividend, VTEB or XLV?
VTEB yields 3.34% while XLV yields 1.60%, so VTEB currently pays the higher dividend yield.
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