VTIP vs XLK
Vanguard Short-Term Inflation-Protected Securities ETF vs State Street Technology Select Sector SPDR ETF
Quick Verdict
VTIP has a lower expense ratio. XLK delivered stronger 1-year returns. XLK offers more diversification with 75 holdings.
Side-by-Side Comparison
| Metric | VTIP | XLK | Winner |
|---|---|---|---|
| Expense Ratio | 0.03% | 0.08% | |
| AUM | $19.3B | $114.1B | |
| Dividend Yield | 3.60% | 0.42% | |
| Holdings | 27 | 76 | |
| YTD Return | +1.85% | +31.20% | |
| 1Y Return | +2.97% | +41.57% | |
| 3Y Return (annualized) | +5.51% | +31.52% | |
| 5Y Return (annualized) | +3.35% | +20.54% | |
| Volatility (annualized) | 2.4% | 23.2% | |
| Max Drawdown | -7.1% | -82.0% | |
| Fund Family | Vanguard (US) | SPDR State Street Global Advisors | |
| Category | Fixed Income | Equity | |
| Inception | Oct 12, 2012 | Dec 16, 1998 |
VTIP vs XLK Performance
Vanguard Short-Term Inflation-Protected Securities ETF (VTIP) is a ETF from Vanguard (US) and State Street Technology Select Sector SPDR ETF (XLK) is a ETF from SPDR State Street Global Advisors. Over the past year VTIP returned +2.97% while XLK returned +41.57%. Year to date, VTIP is up 1.85% versus a gain of 31.20% for XLK.
Over three years, VTIP compounded at +5.51% per year against +31.52% for XLK; over five years the annualized figures are +3.35% and +20.54% respectively. Across the full 14-year window we track, XLK has the edge at +9.50% annualized vs +1.58%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
XLK has been the more volatile fund, with annualized monthly volatility of 23.2% 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 -82.0% for XLK. 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 0.43. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
VTIP charges 0.03% per year while XLK 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 0.42% for XLK.
Holdings Overlap
VTIP and XLK share 0 holdings out of 98 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 XLK?
VTIP has an expense ratio of 0.03% while XLK 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 XLK?
Over the past year VTIP returned +2.97% vs +41.57% for XLK, so XLK leads on 1-year performance. Over the longest common window we track (14 years), VTIP annualized +1.58% vs +9.50% for XLK. Past performance does not guarantee future results.
Which is riskier, VTIP or XLK?
XLK has been the more volatile fund at 23.2% annualized versus 2.4% for VTIP. Worst drawdown: VTIP -7.1% vs XLK -82.0%.
Should I hold both VTIP and XLK?
VTIP and XLK have a monthly-return correlation of 0.43, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VTIP and XLK?
VTIP and XLK share 0 common holdings with a 0.0% weight overlap. Combined, they hold 98 unique securities.
Which pays a higher dividend, VTIP or XLK?
VTIP yields 3.60% while XLK yields 0.42%, so VTIP currently pays the higher dividend yield.
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