VYM vs XLB
Vanguard High Dividend Yield ETF vs State Street Materials Select Sector SPDR ETF
Quick Verdict
VYM has a lower expense ratio. VYM delivered stronger 1-year returns. VYM offers more diversification with 613 holdings.
Side-by-Side Comparison
| Metric | VYM | XLB | Winner |
|---|---|---|---|
| Expense Ratio | 0.04% | 0.08% | |
| AUM | $81.6B | $8.7B | |
| Dividend Yield | 2.24% | 1.68% | |
| Holdings | 613 | 29 | |
| YTD Return | +14.18% | +13.83% | |
| 1Y Return | +20.67% | +15.77% | |
| 3Y Return (annualized) | +18.47% | +10.31% | |
| 5Y Return (annualized) | +12.01% | +6.13% | |
| Volatility (annualized) | 14.5% | 20.7% | |
| Max Drawdown | -58.8% | -60.7% | |
| Fund Family | Vanguard (US) | SPDR State Street Global Advisors | |
| Category | Equity | Equity | |
| Inception | Nov 10, 2006 | Dec 16, 1998 |
VYM vs XLB Performance
Vanguard High Dividend Yield ETF (VYM) is a ETF from Vanguard (US) and State Street Materials Select Sector SPDR ETF (XLB) is a ETF from SPDR State Street Global Advisors. Over the past year VYM returned +20.67% while XLB returned +15.77%. Year to date, VYM is up 14.18% versus a gain of 13.83% for XLB.
Over three years, VYM compounded at +18.47% per year against +10.31% for XLB; over five years the annualized figures are +12.01% and +6.13% respectively. Across the full 20-year window we track, VYM has the edge at +6.97% annualized vs +6.40%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
XLB has been the more volatile fund, with annualized monthly volatility of 20.7% compared with 14.5% for VYM. 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 -58.8% for VYM and -60.7% for XLB. 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 0.85. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
VYM charges 0.04% per year while XLB charges 0.08%. On a $10,000 position that is $4 vs $8 annually, a gap of $4 per year that compounds over a long holding period. On income, VYM currently yields 2.24% against 1.68% for XLB.
Holdings Overlap
VYM and XLB share 14 holdings out of 615 unique holdings combined, representing a 2.6% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, VYM or XLB?
VYM has an expense ratio of 0.04% while XLB charges 0.08%. VYM is the cheaper option. On a $10,000 investment, that is $4 per year of difference.
Which performed better, VYM or XLB?
Over the past year VYM returned +20.67% vs +15.77% for XLB, so VYM leads on 1-year performance. Over the longest common window we track (20 years), VYM annualized +6.97% vs +6.40% for XLB. Past performance does not guarantee future results.
Which is riskier, VYM or XLB?
XLB has been the more volatile fund at 20.7% annualized versus 14.5% for VYM. Worst drawdown: VYM -58.8% vs XLB -60.7%.
Should I hold both VYM and XLB?
VYM and XLB have a monthly-return correlation of 0.85, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VYM and XLB?
VYM and XLB share 14 common holdings with a 2.6% weight overlap. Combined, they hold 615 unique securities.
Which pays a higher dividend, VYM or XLB?
VYM yields 2.24% while XLB yields 1.68%, so VYM currently pays the higher dividend yield.
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