VTIP vs XLF
Vanguard Short-Term Inflation-Protected Securities ETF vs State Street Financial Select Sector SPDR ETF
Quick Verdict
VTIP has a lower expense ratio. XLF delivered stronger 1-year returns. XLF offers more diversification with 77 holdings.
Side-by-Side Comparison
| Metric | VTIP | XLF | Winner |
|---|---|---|---|
| Expense Ratio | 0.03% | 0.08% | |
| AUM | $19.3B | $56.2B | |
| Dividend Yield | 3.60% | 1.51% | |
| Holdings | 27 | 80 | |
| YTD Return | +1.87% | +5.77% | |
| 1Y Return | +3.01% | +13.87% | |
| 3Y Return (annualized) | +5.37% | +19.87% | |
| 5Y Return (annualized) | +3.39% | +10.61% | |
| Volatility (annualized) | 2.4% | 21.4% | |
| Max Drawdown | -7.1% | -83.8% | |
| Fund Family | Vanguard (US) | SPDR State Street Global Advisors | |
| Category | Fixed Income | Equity | |
| Inception | Oct 12, 2012 | Dec 16, 1998 |
VTIP vs XLF Performance
Vanguard Short-Term Inflation-Protected Securities ETF (VTIP) is a ETF from Vanguard (US) and State Street Financial Select Sector SPDR ETF (XLF) is a ETF from SPDR State Street Global Advisors. Over the past year VTIP returned +3.01% while XLF returned +13.87%. Year to date, VTIP is up 1.87% versus a gain of 5.77% for XLF.
Over three years, VTIP compounded at +5.37% per year against +19.87% for XLF; over five years the annualized figures are +3.39% and +10.61% respectively. Across the full 14-year window we track, XLF has the edge at +3.69% annualized vs +1.58%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
XLF has been the more volatile fund, with annualized monthly volatility of 21.4% 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 -83.8% for XLF. 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 0.24. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
VTIP charges 0.03% per year while XLF 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 1.51% for XLF.
Holdings Overlap
VTIP and XLF share 0 holdings out of 100 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 XLF?
VTIP has an expense ratio of 0.03% while XLF 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 XLF?
Over the past year VTIP returned +3.01% vs +13.87% for XLF, so XLF leads on 1-year performance. Over the longest common window we track (14 years), VTIP annualized +1.58% vs +3.69% for XLF. Past performance does not guarantee future results.
Which is riskier, VTIP or XLF?
XLF has been the more volatile fund at 21.4% annualized versus 2.4% for VTIP. Worst drawdown: VTIP -7.1% vs XLF -83.8%.
Should I hold both VTIP and XLF?
VTIP and XLF have a monthly-return correlation of 0.24, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VTIP and XLF?
VTIP and XLF share 0 common holdings with a 0.0% weight overlap. Combined, they hold 100 unique securities.
Which pays a higher dividend, VTIP or XLF?
VTIP yields 3.60% while XLF yields 1.51%, so VTIP currently pays the higher dividend yield.
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