VYM vs XLP
Vanguard High Dividend Yield ETF vs State Street Consumer Staples Select Sector SPDR ETF
Quick Verdict
VYM has a lower expense ratio. VYM delivered stronger 1-year returns. VYM offers more diversification with 558 holdings.
Side-by-Side Comparison
| Metric | VYM | XLP | Winner |
|---|---|---|---|
| Expense Ratio | 0.04% | 0.08% | |
| AUM | $79.0B | $14.5B | |
| Dividend Yield | 2.86% | 2.64% | |
| Holdings | 568 | 39 | |
| YTD Return | +16.16% | +10.38% | |
| 1Y Return | +26.05% | +5.62% | |
| 3Y Return (annualized) | +18.43% | +7.29% | |
| 5Y Return (annualized) | +12.21% | +6.08% | |
| Volatility (annualized) | 14.6% | 12.5% | |
| Max Drawdown | -58.8% | -37.8% | |
| Fund Family | Vanguard (US) | SPDR State Street Global Advisors | |
| Category | Equity | Equity | |
| Inception | Nov 10, 2006 | Dec 16, 1998 |
VYM vs XLP Performance
Vanguard High Dividend Yield ETF (VYM) is a ETF from Vanguard (US) and State Street Consumer Staples Select Sector SPDR ETF (XLP) is a ETF from SPDR State Street Global Advisors. Over the past year VYM returned +26.05% while XLP returned +5.62%. Year to date, VYM is up 16.16% versus a gain of 10.38% for XLP.
Over three years, VYM compounded at +18.43% per year against +7.29% for XLP; over five years the annualized figures are +12.21% and +6.08% respectively. Across the full 20-year window we track, VYM has the edge at +7.09% annualized vs +4.84%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
VYM has been the more volatile fund, with annualized monthly volatility of 14.6% compared with 12.5% for XLP. 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 -37.8% for XLP. 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
VYM charges 0.04% per year while XLP 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 2.64% for XLP.
Holdings Overlap
VYM and XLP share 28 holdings out of 565 unique holdings combined, representing a 11.4% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, VYM or XLP?
VYM has an expense ratio of 0.04% while XLP 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 XLP?
Over the past year VYM returned +26.05% vs +5.62% for XLP, so VYM leads on 1-year performance. Over the longest common window we track (20 years), VYM annualized +7.09% vs +4.84% for XLP. Past performance does not guarantee future results.
Which is riskier, VYM or XLP?
VYM has been the more volatile fund at 14.6% annualized versus 12.5% for XLP. Worst drawdown: VYM -58.8% vs XLP -37.8%.
Should I hold both VYM and XLP?
VYM and XLP 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 VYM and XLP?
VYM and XLP share 28 common holdings with a 11.4% weight overlap. Combined, they hold 565 unique securities.
Which pays a higher dividend, VYM or XLP?
VYM yields 2.86% while XLP yields 2.64%, so VYM currently pays the higher dividend yield.
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