PHO vs. XAR

Last updated Jun 13, 2026

PHO (Invesco Water Resources ETF) and XAR (SPDR S&P Aerospace & Defense ETF) are both exchange-traded funds - PHO is a Water Equities fund tracking the NASDAQ OMX US Water Index, while XAR is a Aerospace & Defense fund tracking the S&P Aerospace & Defense Select Industry Index. Both are passively managed. Over the past 10 years, PHO returned 11.71%/yr vs 18.45%/yr for XAR. A 0.67 correlation means they provide meaningful diversification when combined. PHO charges 0.60%/yr vs 0.35%/yr for XAR.

Performance

PHO vs. XAR - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Invesco Water Resources ETF (PHO) and SPDR S&P Aerospace & Defense ETF (XAR). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, PHO achieves a -4.97% return, which is significantly lower than XAR's 16.10% return. Over the past 10 years, PHO has underperformed XAR with an annualized return of 11.71%, while XAR has yielded a comparatively higher 18.45% annualized return.

PHO

• 1D: 0.63%
• 1M: 2.30%
• YTD: -4.97%
• 6M: -6.44%
• 1Y: -1.80%
• 3Y*: 7.13%
• 5Y*: 5.17%
• 10Y*: 11.71%

XAR

• 1D: -1.55%
• 1M: 3.18%
• YTD: 16.10%
• 6M: 18.39%
• 1Y: 42.07%
• 3Y*: 33.32%
• 5Y*: 16.58%
• 10Y*: 18.45%

*Multi-year figures are annualized to reflect compound growth (CAGR)

PHO vs. XAR - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
PHO Invesco Water Resources ETF	-4.97%	7.62%	8.59%	18.85%	-14.86%	31.28%	20.83%	37.57%	-6.40%	23.55%
XAR SPDR S&P Aerospace & Defense ETF	16.10%	46.15%	23.32%	23.79%	-5.02%	2.31%	6.18%	39.33%	-4.58%	33.00%

Correlation

The correlation between PHO and XAR is 0.51, which is moderate. They share some common price drivers but move independently often enough to provide real diversification benefit when combined.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.51
Correlation (3Y) Calculated over the trailing 3-year period	0.59
Correlation (5Y) Calculated over the trailing 5-year period	0.64
Correlation (10Y) Calculated over the trailing 10-year period	0.68
Correlation (All Time) Calculated using the full available price history since Sep 29, 2011	0.67

The correlation between PHO and XAR shifts across timeframes, from 0.51 (1 year) to 0.68 (10 years), reflecting how their relationship changes across market environments.

PHO vs. XAR - Sectors Allocation Comparison

Sectors	PHO	XAR
Industrials	56.3%	99.1%
Utilities	14.1%	-
Technology	13.1%	0.8%
Basic Materials	8.4%	-
Healthcare	8.2%	-
Financial Services	0.0%	-
Communication Services	-	-
Consumer Cyclical	-	-
Consumer Defensive	-	-
Energy	-	-
Real Estate	-	-

Return for Risk

PHO vs. XAR — Risk / Return Rank

Compare risk-adjusted metric ranks to identify better-performing investments over the past 12 months.

PHO

PHO Risk / Return Rank: 7
PHO Sharpe Ratio Rank: 7
PHO Sortino Ratio Rank: 7
PHO Omega Ratio Rank: 7
PHO Calmar Ratio Rank: 7
PHO Martin Ratio Rank: 7

XAR

XAR Risk / Return Rank: 49
XAR Sharpe Ratio Rank: 49
XAR Sortino Ratio Rank: 51
XAR Omega Ratio Rank: 44
XAR Calmar Ratio Rank: 56
XAR Martin Ratio Rank: 48

The rank (0–100) shows how this investment's returns compare to the risk taken. Higher = better. Based on the past 12 months of data, combining Sharpe, Sortino, and other metrics used by quantitative funds and institutional investors.

PHO vs. XAR - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Invesco Water Resources ETF (PHO) and SPDR S&P Aerospace & Defense ETF (XAR). Risk-adjusted metrics are performance indicators that assess an investment's returns in relation to its risk, enabling a more accurate comparison of different investment options.

Values are calculated on a 1-year rolling basis and updated daily. Risk-adjusted metrics are more stable over longer periods — use the period switch above to explore them.

	PHO	XAR	Difference
Sharpe ratio: Return per unit of total volatility	-0.21	1.50	-1.72
Sortino ratio: Return per unit of downside risk	-0.20	2.20	-2.39
Omega ratio: Gain probability vs. loss probability	0.98	1.25	-0.27
Calmar ratio: Return relative to maximum drawdown	-0.23	2.43	-2.66
Martin ratio: Return relative to average drawdown	-0.58	6.81	-7.39

PHO vs. XAR - Sharpe Ratio Comparison

The current PHO Sharpe Ratio is -0.21, which is lower than the XAR Sharpe Ratio of 1.50. The chart below compares the historical Sharpe Ratios of PHO and XAR, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Drawdowns

PHO vs. XAR - Drawdown Comparison

The maximum PHO drawdown since its inception was -55.62%, which is greater than XAR's maximum drawdown of -46.37%. Use the drawdown chart below to compare losses from any high point for PHO and XAR.

Drawdown Indicators

	PHO	XAR	Difference
Max Drawdown Largest peak-to-trough decline	-55.62%	-46.37%	-9.25%
Max Drawdown (1Y) Largest decline over 1 year	-13.78%	-17.22%	+3.44%
Max Drawdown (3Y) Largest decline over 3 years	-19.19%	-19.73%	+0.54%
Max Drawdown (5Y) Largest decline over 5 years	-28.60%	-32.40%	+3.80%
Max Drawdown (10Y) Largest decline over 10 years	-34.92%	-46.37%	+11.45%
Current Drawdown Current decline from peak	-10.21%	-4.32%	-5.89%
Average Drawdown Average peak-to-trough decline	-10.18%	-6.78%	-3.40%
Ulcer Index Depth and duration of drawdowns from previous peaks	5.59%	6.13%	-0.54%

Volatility

PHO vs. XAR - Volatility Comparison

The current volatility for Invesco Water Resources ETF (PHO) is 4.41%, while SPDR S&P Aerospace & Defense ETF (XAR) has a volatility of 11.46%. This indicates that PHO experiences smaller price fluctuations and is considered to be less risky than XAR based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	PHO	XAR	Difference
Volatility (1M) Calculated over the trailing 1-month period	4.41%	11.46%	-7.05%
Volatility (6M) Calculated over the trailing 6-month period	11.15%	23.56%	-12.41%
Volatility (1Y) Calculated over the trailing 1-year period	15.12%	27.85%	-12.73%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	18.40%	23.66%	-5.26%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	19.46%	24.74%	-5.28%

PHO vs. XAR - Expense Ratio Comparison

PHO has a 0.60% expense ratio, which is higher than XAR's 0.35% expense ratio.

Dividends

PHO vs. XAR - Dividend Comparison

PHO's dividend yield for the trailing twelve months is around 0.58%, more than XAR's 0.31% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
PHO Invesco Water Resources ETF	0.58%	0.54%	0.45%	0.59%	0.49%	0.20%	0.39%	0.43%	0.46%	0.34%	0.47%	0.75%
XAR SPDR S&P Aerospace & Defense ETF	0.31%	0.40%	0.66%	0.54%	0.50%	0.83%	0.63%	0.75%	1.19%	0.76%	1.09%	2.31%

Frequently Asked Questions

Can I hold both PHO and XAR in my portfolio?

PHO and XAR have a correlation of 0.51, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, PHO or XAR?

XAR has higher volatility (11.46%) compared to PHO (4.41%). In terms of maximum drawdown, PHO dropped -55.62% vs XAR's -46.37%.

Which ETF is better, PHO or XAR?

On 10-year performance, XAR leads with 18.45% vs 11.71% for PHO. On fees, XAR is cheaper at 0.35% per year. On volatility, PHO has been the lower-risk option at 4.41%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, PHO or XAR?

Over the 10-year period, XAR has performed better with a 18.45% return vs 11.71%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, PHO or XAR?

XAR is cheaper with a 0.35% expense ratio, compared with 0.60% for PHO.

Which ETF pays a higher dividend yield, PHO or XAR?

PHO has the higher dividend yield at 0.58%, compared with 0.31% for XAR.

What is the main difference between PHO and XAR?

PHO is categorized as Water Equities, while XAR is Aerospace & Defense. PHO tracks NASDAQ OMX US Water Index, while XAR tracks S&P Aerospace & Defense Select Industry Index. They also come from different issuers: Invesco and State Street. Their fees differ too: 0.60% for PHO and 0.35% for XAR.

Which has better risk-adjusted returns?

XAR currently has the higher Sharpe Ratio (1.50 vs -0.21), meaning it's delivered slightly more return per unit of risk over the trailing 12 months. However, this ranking shifts over time - use the Risk/Return Score above for a more comprehensive view that combines Sharpe, Sortino, and other measures used by quantitative funds.