VXF vs XLF
Vanguard Extended Market ETF vs State Street Financial Select Sector SPDR ETF
Quick Verdict
VXF has a lower expense ratio. VXF delivered stronger 1-year returns. VXF offers more diversification with 3,376 holdings.
Side-by-Side Comparison
| Metric | VXF | XLF | Winner |
|---|---|---|---|
| Expense Ratio | 0.05% | 0.08% | |
| AUM | $30.5B | $58.6B | |
| Dividend Yield | 1.03% | 1.42% | |
| Holdings | 3,376 | 80 | |
| YTD Return | +15.71% | +4.58% | |
| 1Y Return | +23.93% | +9.39% | |
| 3Y Return (annualized) | +19.90% | +20.74% | |
| 5Y Return (annualized) | +7.18% | +10.51% | |
| Volatility (annualized) | 18.7% | 21.4% | |
| Max Drawdown | -59.4% | -83.8% | |
| Fund Family | Vanguard (US) | SPDR State Street Global Advisors | |
| Category | Equity | Equity | |
| Inception | Dec 27, 2001 | Dec 16, 1998 |
VXF vs XLF Performance
Vanguard Extended Market ETF (VXF) 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 VXF returned +23.93% while XLF returned +9.39%. Year to date, VXF is up 15.71% versus a gain of 4.58% for XLF.
Over three years, VXF compounded at +19.90% per year against +20.74% for XLF; over five years the annualized figures are +7.18% and +10.51% respectively. Across the full 25-year window we track, VXF has the edge at +9.01% annualized vs +3.64%. 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 18.7% for VXF. 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 -59.4% for VXF 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 0.79. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
VXF charges 0.05% per year while XLF charges 0.08%. On a $10,000 position that is $5 vs $8 annually, a gap of $3 per year that compounds over a long holding period. On income, VXF currently yields 1.03% against 1.42% for XLF.
Holdings Overlap
VXF and XLF share 0 holdings out of 3371 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, VXF or XLF?
VXF has an expense ratio of 0.05% while XLF charges 0.08%. VXF is the cheaper option. On a $10,000 investment, that is $3 per year of difference.
Which performed better, VXF or XLF?
Over the past year VXF returned +23.93% vs +9.39% for XLF, so VXF leads on 1-year performance. Over the longest common window we track (25 years), VXF annualized +9.01% vs +3.64% for XLF. Past performance does not guarantee future results.
Which is riskier, VXF or XLF?
XLF has been the more volatile fund at 21.4% annualized versus 18.7% for VXF. Worst drawdown: VXF -59.4% vs XLF -83.8%.
Should I hold both VXF and XLF?
VXF and XLF have a monthly-return correlation of 0.79, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VXF and XLF?
VXF and XLF share 0 common holdings with a 0.0% weight overlap. Combined, they hold 3371 unique securities.
Which pays a higher dividend, VXF or XLF?
VXF yields 1.03% while XLF yields 1.42%, so XLF currently pays the higher dividend yield.
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