VWO vs XLE
Vanguard FTSE Emerging Markets ETF vs State Street Energy Select Sector SPDR ETF
Quick Verdict
VWO has a lower expense ratio. XLE delivered stronger 1-year returns. VWO offers more diversification with 6,334 holdings.
Side-by-Side Comparison
| Metric | VWO | XLE | Winner |
|---|---|---|---|
| Expense Ratio | 0.06% | 0.08% | |
| AUM | $122.0B | $40.0B | |
| Dividend Yield | 2.39% | 2.55% | |
| Holdings | 6,334 | 24 | |
| YTD Return | +10.18% | +41.33% | |
| 1Y Return | +20.99% | +51.94% | |
| 3Y Return (annualized) | +18.45% | +16.98% | |
| 5Y Return (annualized) | +7.14% | +26.28% | |
| Volatility (annualized) | 20.1% | 25.1% | |
| Max Drawdown | -68.3% | -76.7% | |
| Fund Family | Vanguard (US) | SPDR State Street Global Advisors | |
| Category | Equity | Equity | |
| Inception | Mar 4, 2005 | Dec 16, 1998 |
VWO vs XLE Performance
Vanguard FTSE Emerging Markets ETF (VWO) 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 VWO returned +20.99% while XLE returned +51.94%. Year to date, VWO is up 10.18% versus a gain of 41.33% for XLE.
Over three years, VWO compounded at +18.45% per year against +16.98% for XLE; over five years the annualized figures are +7.14% and +26.28% respectively. Across the full 21-year window we track, XLE has the edge at +7.12% annualized vs +4.98%. 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 20.1% for VWO. 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 -68.3% for VWO 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 0.56. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
VWO charges 0.06% per year while XLE charges 0.08%. On a $10,000 position that is $6 vs $8 annually, a gap of $2 per year that compounds over a long holding period. On income, VWO currently yields 2.39% against 2.55% for XLE.
Holdings Overlap
VWO and XLE share 0 holdings out of 4006 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, VWO or XLE?
VWO has an expense ratio of 0.06% while XLE charges 0.08%. VWO is the cheaper option. On a $10,000 investment, that is $2 per year of difference.
Which performed better, VWO or XLE?
Over the past year VWO returned +20.99% vs +51.94% for XLE, so XLE leads on 1-year performance. Over the longest common window we track (21 years), VWO annualized +4.98% vs +7.12% for XLE. Past performance does not guarantee future results.
Which is riskier, VWO or XLE?
XLE has been the more volatile fund at 25.1% annualized versus 20.1% for VWO. Worst drawdown: VWO -68.3% vs XLE -76.7%.
Should I hold both VWO and XLE?
VWO and XLE have a monthly-return correlation of 0.56, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VWO and XLE?
VWO and XLE share 0 common holdings with a 0.0% weight overlap. Combined, they hold 4006 unique securities.
Which pays a higher dividend, VWO or XLE?
VWO yields 2.39% while XLE yields 2.55%, so XLE currently pays the higher dividend yield.
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