VYM vs XLC
Vanguard High Dividend Yield ETF vs State Street Communication Services Select Sector SPDR ETF
Quick Verdict
VYM has a lower expense ratio. VYM delivered stronger 1-year returns. VYM offers more diversification with 616 holdings.
Side-by-Side Comparison
| Metric | VYM | XLC | Winner |
|---|---|---|---|
| Expense Ratio | 0.04% | 0.08% | |
| AUM | $81.6B | $22.7B | |
| Dividend Yield | 2.24% | 1.32% | |
| Holdings | 616 | 26 | |
| YTD Return | +16.42% | -2.82% | |
| 1Y Return | +24.22% | +2.85% | |
| 3Y Return (annualized) | +19.03% | +20.37% | |
| 5Y Return (annualized) | +12.21% | +7.38% | |
| Volatility (annualized) | 14.6% | 19.0% | |
| Max Drawdown | -58.8% | -46.6% | |
| Fund Family | Vanguard (US) | SPDR State Street Global Advisors | |
| Category | Equity | Equity | |
| Inception | Nov 10, 2006 | Jun 18, 2018 |
VYM vs XLC Performance
Vanguard High Dividend Yield ETF (VYM) is a ETF from Vanguard (US) and State Street Communication Services Select Sector SPDR ETF (XLC) is a ETF from SPDR State Street Global Advisors. Over the past year VYM returned +24.22% while XLC returned +2.85%. Year to date, VYM is up 16.42% versus a loss of 2.82% for XLC.
Over three years, VYM compounded at +19.03% per year against +20.37% for XLC; over five years the annualized figures are +12.21% and +7.38% respectively. Across the full 8-year window we track, XLC has the edge at +11.27% annualized vs +7.10%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
XLC has been the more volatile fund, with annualized monthly volatility of 19.0% compared with 14.6% 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 -46.6% for XLC. 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 0.74. They usually move together, but the gap leaves some room for diversification.
Fees and Cost Over Time
VYM charges 0.04% per year while XLC 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 1.32% for XLC.
Holdings Overlap
VYM and XLC share 7 holdings out of 620 unique holdings combined, representing a 2.2% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, VYM or XLC?
VYM has an expense ratio of 0.04% while XLC 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 XLC?
Over the past year VYM returned +24.22% vs +2.85% for XLC, so VYM leads on 1-year performance. Over the longest common window we track (8 years), VYM annualized +7.10% vs +11.27% for XLC. Past performance does not guarantee future results.
Which is riskier, VYM or XLC?
XLC has been the more volatile fund at 19.0% annualized versus 14.6% for VYM. Worst drawdown: VYM -58.8% vs XLC -46.6%.
Should I hold both VYM and XLC?
VYM and XLC have a monthly-return correlation of 0.74, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VYM and XLC?
VYM and XLC share 7 common holdings with a 2.2% weight overlap. Combined, they hold 620 unique securities.
Which pays a higher dividend, VYM or XLC?
VYM yields 2.24% while XLC yields 1.32%, so VYM currently pays the higher dividend yield.
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