VTIP vs XLE
Vanguard Short-Term Inflation-Protected Securities ETF vs State Street Energy Select Sector SPDR ETF
Quick Verdict
VTIP has a lower expense ratio. XLE delivered stronger 1-year returns. VTIP offers more diversification with 23 holdings.
Side-by-Side Comparison
| Metric | VTIP | XLE | Winner |
|---|---|---|---|
| Expense Ratio | 0.03% | 0.08% | |
| AUM | $19.3B | $38.1B | |
| Dividend Yield | 3.60% | 2.85% | |
| Holdings | 27 | 25 | |
| YTD Return | +1.89% | +33.65% | |
| 1Y Return | +2.97% | +47.31% | |
| 3Y Return (annualized) | +5.46% | +13.81% | |
| 5Y Return (annualized) | +3.38% | +23.79% | |
| Volatility (annualized) | 2.4% | 25.1% | |
| Max Drawdown | -7.1% | -76.7% | |
| Fund Family | Vanguard (US) | SPDR State Street Global Advisors | |
| Category | Fixed Income | Equity | |
| Inception | Oct 12, 2012 | Dec 16, 1998 |
VTIP vs XLE Performance
Vanguard Short-Term Inflation-Protected Securities ETF (VTIP) 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 VTIP returned +2.97% while XLE returned +47.31%. Year to date, VTIP is up 1.89% versus a gain of 33.65% for XLE.
Over three years, VTIP compounded at +5.46% per year against +13.81% for XLE; over five years the annualized figures are +3.38% and +23.79% respectively. Across the full 14-year window we track, XLE has the edge at +6.91% annualized vs +1.58%. 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 2.4% for VTIP. 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 -7.1% for VTIP 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 0.32. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
VTIP 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, VTIP currently yields 3.60% against 2.85% for XLE.
Holdings Overlap
VTIP and XLE share 0 holdings out of 45 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, VTIP or XLE?
VTIP has an expense ratio of 0.03% while XLE charges 0.08%. VTIP is the cheaper option. On a $10,000 investment, that is $5 per year of difference.
Which performed better, VTIP or XLE?
Over the past year VTIP returned +2.97% vs +47.31% for XLE, so XLE leads on 1-year performance. Over the longest common window we track (14 years), VTIP annualized +1.58% vs +6.91% for XLE. Past performance does not guarantee future results.
Which is riskier, VTIP or XLE?
XLE has been the more volatile fund at 25.1% annualized versus 2.4% for VTIP. Worst drawdown: VTIP -7.1% vs XLE -76.7%.
Should I hold both VTIP and XLE?
VTIP and XLE have a monthly-return correlation of 0.32, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VTIP and XLE?
VTIP and XLE share 0 common holdings with a 0.0% weight overlap. Combined, they hold 45 unique securities.
Which pays a higher dividend, VTIP or XLE?
VTIP yields 3.60% while XLE yields 2.85%, so VTIP currently pays the higher dividend yield.
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