SMH vs. XLC

Last updated Jun 13, 2026

SMH (VanEck Semiconductor ETF) and XLC (Communication Services Select Sector SPDR Fund) are both exchange-traded funds - SMH is a Semiconductors fund tracking the MVIS US Listed Semiconductor 25 Index, while XLC is a Communications Equities fund tracking the S&P Communication Services Select Sector Index. Both are passively managed. Over the past 5 years, SMH returned 38.42%/yr vs 8.03%/yr for XLC. A 0.63 correlation means they provide meaningful diversification when combined. SMH charges 0.35%/yr vs 0.13%/yr for XLC.

Performance

SMH vs. XLC - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in VanEck Semiconductor ETF (SMH) and Communication Services Select Sector SPDR Fund (XLC). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, SMH achieves a 72.15% return, which is significantly higher than XLC's -4.85% return.

SMH

• 1D: 1.72%
• 1M: 8.30%
• YTD: 72.15%
• 6M: 75.62%
• 1Y: 136.32%
• 3Y*: 60.05%
• 5Y*: 38.42%
• 10Y*: 37.49%

XLC

• 1D: -0.42%
• 1M: -4.38%
• YTD: -4.85%
• 6M: -3.59%
• 1Y: 9.07%
• 3Y*: 21.60%
• 5Y*: 8.03%
• 10Y*: —

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

SMH vs. XLC - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018
SMH VanEck Semiconductor ETF	72.15%	49.17%	39.10%	73.38%	-33.53%	42.13%	55.53%	64.45%	-18.37%
XLC Communication Services Select Sector SPDR Fund	-4.85%	23.08%	34.71%	52.82%	-37.63%	15.96%	26.90%	31.05%	-16.45%

Correlation

The correlation between SMH and XLC is 0.27, which is low. Their price movements are largely independent, making them effective diversification partners.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.27
Correlation (3Y) Calculated over the trailing 3-year period	0.47
Correlation (5Y) Calculated over the trailing 5-year period	0.60
Correlation (All Time) Calculated using the full available price history since Jun 19, 2018	0.63

Over the past year, the correlation between SMH and XLC has dropped to 0.27 - well below their long-term average of 0.63, suggesting their price drivers have been diverging.

SMH vs. XLC - Sectors Allocation Comparison

Sectors	SMH	XLC
Technology	100.0%	4.7%
Basic Materials	-	-
Communication Services	-	95.1%
Consumer Cyclical	-	-
Consumer Defensive	-	-
Energy	-	-
Financial Services	-	-
Healthcare	-	-
Industrials	-	-
Real Estate	-	-
Utilities	-	-

Return for Risk

SMH vs. XLC — Risk / Return Rank

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

SMH

SMH Risk / Return Rank: 96
SMH Sharpe Ratio Rank: 97
SMH Sortino Ratio Rank: 94
SMH Omega Ratio Rank: 94
SMH Calmar Ratio Rank: 97
SMH Martin Ratio Rank: 96

XLC

XLC Risk / Return Rank: 22
XLC Sharpe Ratio Rank: 22
XLC Sortino Ratio Rank: 22
XLC Omega Ratio Rank: 20
XLC Calmar Ratio Rank: 22
XLC Martin Ratio Rank: 24

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.

SMH vs. XLC - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for VanEck Semiconductor ETF (SMH) and Communication Services Select Sector SPDR Fund (XLC). 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.

	SMH	XLC	Difference
Sharpe ratio: Return per unit of total volatility	4.13	0.69	+3.44
Sortino ratio: Return per unit of downside risk	4.26	1.08	+3.18
Omega ratio: Gain probability vs. loss probability	1.60	1.12	+0.48
Calmar ratio: Return relative to maximum drawdown	9.18	0.86	+8.32
Martin ratio: Return relative to average drawdown	33.74	2.73	+31.01

SMH vs. XLC - Sharpe Ratio Comparison

The current SMH Sharpe Ratio is 4.13, which is higher than the XLC Sharpe Ratio of 0.69. The chart below compares the historical Sharpe Ratios of SMH and XLC, 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

SMH vs. XLC - Drawdown Comparison

The maximum SMH drawdown since its inception was -84.96%, which is greater than XLC's maximum drawdown of -46.65%. Use the drawdown chart below to compare losses from any high point for SMH and XLC.

Drawdown Indicators

	SMH	XLC	Difference
Max Drawdown Largest peak-to-trough decline	-84.96%	-46.65%	-38.31%
Max Drawdown (1Y) Largest decline over 1 year	-14.93%	-10.57%	-4.36%
Max Drawdown (3Y) Largest decline over 3 years	-35.74%	-17.97%	-17.77%
Max Drawdown (5Y) Largest decline over 5 years	-45.30%	-46.65%	+1.35%
Max Drawdown (10Y) Largest decline over 10 years	-45.30%	—	—
Current Drawdown Current decline from peak	-2.81%	-6.72%	+3.91%
Average Drawdown Average peak-to-trough decline	-41.04%	-10.58%	-30.46%
Ulcer Index Depth and duration of drawdowns from previous peaks	4.06%	3.33%	+0.73%

Volatility

SMH vs. XLC - Volatility Comparison

VanEck Semiconductor ETF (SMH) has a higher volatility of 16.25% compared to Communication Services Select Sector SPDR Fund (XLC) at 3.57%. This indicates that SMH's price experiences larger fluctuations and is considered to be riskier than XLC based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	SMH	XLC	Difference
Volatility (1M) Calculated over the trailing 1-month period	16.25%	3.57%	+12.68%
Volatility (6M) Calculated over the trailing 6-month period	27.73%	9.65%	+18.08%
Volatility (1Y) Calculated over the trailing 1-year period	33.20%	13.28%	+19.92%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	35.47%	20.68%	+14.79%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	32.82%	22.17%	+10.65%

SMH vs. XLC - Expense Ratio Comparison

SMH has a 0.35% expense ratio, which is higher than XLC's 0.13% expense ratio.

Dividends

SMH vs. XLC - Dividend Comparison

SMH's dividend yield for the trailing twelve months is around 0.18%, less than XLC's 1.25% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
SMH VanEck Semiconductor ETF	0.18%	0.31%	0.44%	0.60%	1.18%	0.51%	0.69%	1.50%	1.88%	1.43%	0.80%	2.14%
XLC Communication Services Select Sector SPDR Fund	1.25%	1.13%	0.99%	0.82%	1.10%	0.74%	0.68%	0.82%	0.64%	0.00%	0.00%	0.00%

Frequently Asked Questions

Can I hold both SMH and XLC in my portfolio?

SMH and XLC have a correlation of 0.27, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, SMH or XLC?

SMH has higher volatility (16.25%) compared to XLC (3.57%). In terms of maximum drawdown, SMH dropped -84.96% vs XLC's -46.65%.

Which ETF is better, SMH or XLC?

On 5-year performance, SMH leads with 38.42% vs 8.03% for XLC. On fees, XLC is cheaper at 0.13% per year. On volatility, XLC has been the lower-risk option at 3.57%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, SMH or XLC?

Over the 5-year period, SMH has performed better with a 38.42% return vs 8.03%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, SMH or XLC?

XLC is cheaper with a 0.13% expense ratio, compared with 0.35% for SMH.

Which ETF pays a higher dividend yield, SMH or XLC?

XLC has the higher dividend yield at 1.25%, compared with 0.18% for SMH.

What is the main difference between SMH and XLC?

SMH is categorized as Semiconductors, while XLC is Communications Equities. SMH tracks MVIS US Listed Semiconductor 25 Index, while XLC tracks S&P Communication Services Select Sector Index. They also come from different issuers: VanEck and State Street. Their fees differ too: 0.35% for SMH and 0.13% for XLC.

Which has better risk-adjusted returns?

SMH currently has the higher Sharpe Ratio (4.13 vs 0.69), 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.