VYM vs XLE
Vanguard High Dividend Yield ETF vs State Street Energy Select Sector SPDR ETF
Quick Verdict
VYM has a lower expense ratio. XLE delivered stronger 1-year returns. VYM offers more diversification with 568 holdings.
Side-by-Side Comparison
| Metric | VYM | XLE | Winner |
|---|---|---|---|
| Expense Ratio | 0.04% | 0.08% | |
| AUM | $79.0B | $38.1B | |
| Dividend Yield | 2.86% | 2.85% | |
| Holdings | 568 | 25 | |
| YTD Return | +16.78% | +35.60% | |
| 1Y Return | +24.43% | +47.04% | |
| 3Y Return (annualized) | +18.60% | +14.53% | |
| 5Y Return (annualized) | +12.30% | +24.28% | |
| Volatility (annualized) | 14.6% | 25.1% | |
| Max Drawdown | -58.8% | -76.7% | |
| Fund Family | Vanguard (US) | SPDR State Street Global Advisors | |
| Category | Equity | Equity | |
| Inception | Nov 10, 2006 | Dec 16, 1998 |
VYM vs XLE Performance
Vanguard High Dividend Yield ETF (VYM) 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 VYM returned +24.43% while XLE returned +47.04%. Year to date, VYM is up 16.78% versus a gain of 35.60% for XLE.
Over three years, VYM compounded at +18.60% per year against +14.53% for XLE; over five years the annualized figures are +12.30% and +24.28% respectively. Across the full 20-year window we track, VYM has the edge at +7.11% 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 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 -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 0.68. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
VYM charges 0.04% per year while XLE 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 2.86% against 2.85% for XLE.
Holdings Overlap
VYM and XLE share 20 holdings out of 560 unique holdings combined, representing a 8.7% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, VYM or XLE?
VYM has an expense ratio of 0.04% while XLE 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 XLE?
Over the past year VYM returned +24.43% vs +47.04% for XLE, so XLE leads on 1-year performance. Over the longest common window we track (20 years), VYM annualized +7.11% vs +6.96% for XLE. Past performance does not guarantee future results.
Which is riskier, VYM or XLE?
XLE has been the more volatile fund at 25.1% annualized versus 14.6% for VYM. Worst drawdown: VYM -58.8% vs XLE -76.7%.
Should I hold both VYM and XLE?
VYM and XLE have a monthly-return correlation of 0.68, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between VYM and XLE?
VYM and XLE share 20 common holdings with a 8.7% weight overlap. Combined, they hold 560 unique securities.
Which pays a higher dividend, VYM or XLE?
VYM yields 2.86% while XLE yields 2.85%, so VYM currently pays the higher dividend yield.
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