VUG vs XLE
Vanguard Growth ETF vs State Street Energy Select Sector SPDR ETF
Quick Verdict
VUG has a lower expense ratio. XLE delivered stronger 1-year returns. VUG offers more diversification with 155 holdings.
Side-by-Side Comparison
| Metric | VUG | XLE | Winner |
|---|---|---|---|
| Expense Ratio | 0.03% | 0.08% | |
| AUM | $223.2B | $38.1B | |
| Dividend Yield | 0.47% | 2.85% | |
| Holdings | 155 | 25 | |
| YTD Return | +10.98% | +35.60% | |
| 1Y Return | +16.82% | +47.04% | |
| 3Y Return (annualized) | +24.53% | +14.53% | |
| 5Y Return (annualized) | +13.10% | +24.28% | |
| Volatility (annualized) | 16.5% | 25.1% | |
| Max Drawdown | -51.4% | -76.7% | |
| Fund Family | Vanguard (US) | SPDR State Street Global Advisors | |
| Category | Equity | Equity | |
| Inception | Jan 26, 2004 | Dec 16, 1998 |
VUG vs XLE Performance
Vanguard Growth ETF (VUG) 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 VUG returned +16.82% while XLE returned +47.04%. Year to date, VUG is up 10.98% versus a gain of 35.60% for XLE.
Over three years, VUG compounded at +24.53% per year against +14.53% for XLE; over five years the annualized figures are +13.10% and +24.28% respectively. Across the full 23-year window we track, VUG has the edge at +11.31% annualized vs +6.96%. 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 16.5% for VUG. 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 -51.4% for VUG 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 0.47. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
VUG 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, VUG currently yields 0.47% against 2.85% for XLE.
Holdings Overlap
VUG and XLE share 3 holdings out of 165 unique holdings combined, representing a 0.3% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, VUG or XLE?
VUG has an expense ratio of 0.03% while XLE charges 0.08%. VUG is the cheaper option. On a $10,000 investment, that is $5 per year of difference.
Which performed better, VUG or XLE?
Over the past year VUG returned +16.82% vs +47.04% for XLE, so XLE leads on 1-year performance. Over the longest common window we track (23 years), VUG annualized +11.31% vs +6.96% for XLE. Past performance does not guarantee future results.
Which is riskier, VUG or XLE?
XLE has been the more volatile fund at 25.1% annualized versus 16.5% for VUG. Worst drawdown: VUG -51.4% vs XLE -76.7%.
Should I hold both VUG and XLE?
VUG and XLE have a monthly-return correlation of 0.47, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VUG and XLE?
VUG and XLE share 3 common holdings with a 0.3% weight overlap. Combined, they hold 165 unique securities.
Which pays a higher dividend, VUG or XLE?
VUG yields 0.47% while XLE yields 2.85%, so XLE currently pays the higher dividend yield.
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