VAW vs. FXZ

Last updated Jun 24, 2026

VAW (Vanguard Materials ETF) and FXZ (First Trust Materials AlphaDEX Fund) are both Materials funds - VAW tracks the MSCI US Investable Market Materials 25/50 Index while FXZ tracks the StrataQuant Materials Index. Both are passively managed. Over the past 10 years, VAW returned 10.46%/yr vs 11.46%/yr for FXZ. Their correlation of 0.91 suggests significant overlap in exposure. VAW charges 0.09%/yr vs 0.67%/yr for FXZ.

Performance

VAW vs. FXZ - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Vanguard Materials ETF (VAW) and First Trust Materials AlphaDEX Fund (FXZ). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, VAW achieves a 11.07% return, which is significantly lower than FXZ's 24.42% return. Over the past 10 years, VAW has underperformed FXZ with an annualized return of 10.46%, while FXZ has yielded a comparatively higher 11.46% annualized return.

VAW

• 1D: -1.83%
• 1M: 0.83%
• YTD: 11.07%
• 6M: 9.68%
• 1Y: 20.68%
• 3Y*: 11.22%
• 5Y*: 6.68%
• 10Y*: 10.46%

FXZ

• 1D: -2.45%
• 1M: 0.61%
• YTD: 24.42%
• 6M: 22.36%
• 1Y: 44.84%
• 3Y*: 11.20%
• 5Y*: 8.66%
• 10Y*: 11.46%

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

VAW vs. FXZ - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
VAW Vanguard Materials ETF	11.07%	12.30%	0.48%	13.67%	-11.80%	27.43%	19.44%	23.53%	-17.49%	23.76%
FXZ First Trust Materials AlphaDEX Fund	24.42%	16.25%	-16.31%	16.27%	-0.92%	30.84%	22.52%	21.52%	-22.62%	23.72%

Correlation

The correlation between VAW and FXZ is 0.94, indicating a strong positive relationship between their price movements. Combining them offers limited diversification - they tend to fall together during downturns.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.94
Correlation (3Y) Calculated over the trailing 3-year period	0.92
Correlation (5Y) Calculated over the trailing 5-year period	0.93
Correlation (10Y) Calculated over the trailing 10-year period	0.93
Correlation (All Time) Calculated using the full available price history since May 10, 2007	0.91

The correlation between VAW and FXZ has been stable across timeframes, ranging from 0.91 to 0.94 - a consistent structural relationship.

VAW vs. FXZ - Sectors Allocation Comparison

Sectors	VAW	FXZ
Basic Materials	90.1%	76.9%
Consumer Cyclical	8.3%	5.1%
Industrials	1.1%	15.4%
Healthcare	0.5%	-
Technology	0.1%	-
Consumer Defensive	0.0%	-
Energy	0.0%	-
Communication Services	-	-
Financial Services	-	-
Real Estate	-	-
Utilities	-	-

Return for Risk

VAW vs. FXZ — Risk / Return Rank

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

VAW

VAW Risk / Return Rank: 32
VAW Sharpe Ratio Rank: 32
VAW Sortino Ratio Rank: 32
VAW Omega Ratio Rank: 30
VAW Calmar Ratio Rank: 32
VAW Martin Ratio Rank: 34

FXZ

FXZ Risk / Return Rank: 66
FXZ Sharpe Ratio Rank: 64
FXZ Sortino Ratio Rank: 61
FXZ Omega Ratio Rank: 57
FXZ Calmar Ratio Rank: 74
FXZ Martin Ratio Rank: 73

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.

VAW vs. FXZ - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard Materials ETF (VAW) and First Trust Materials AlphaDEX Fund (FXZ). 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.

	VAW	FXZ	Difference
Sharpe ratio: Return per unit of total volatility	1.13	1.98	-0.85
Sortino ratio: Return per unit of downside risk	1.65	2.68	-1.03
Omega ratio: Gain probability vs. loss probability	1.20	1.33	-0.13
Calmar ratio: Return relative to maximum drawdown	1.55	3.53	-1.99
Martin ratio: Return relative to average drawdown	4.90	13.08	-8.18

VAW vs. FXZ - Sharpe Ratio Comparison

The current VAW Sharpe Ratio is 1.13, which is lower than the FXZ Sharpe Ratio of 1.98. The chart below compares the historical Sharpe Ratios of VAW and FXZ, 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

VAW vs. FXZ - Drawdown Comparison

The maximum VAW drawdown since its inception was -62.17%, smaller than the maximum FXZ drawdown of -65.46%. Use the drawdown chart below to compare losses from any high point for VAW and FXZ.

Drawdown Indicators

	VAW	FXZ	Difference
Max Drawdown Largest peak-to-trough decline	-62.17%	-65.46%	+3.29%
Max Drawdown (1Y) Largest decline over 1 year	-13.42%	-12.75%	-0.67%
Max Drawdown (3Y) Largest decline over 3 years	-23.21%	-33.99%	+10.78%
Max Drawdown (5Y) Largest decline over 5 years	-25.50%	-33.99%	+8.49%
Max Drawdown (10Y) Largest decline over 10 years	-41.13%	-49.41%	+8.28%
Current Drawdown Current decline from peak	-5.58%	-5.23%	-0.35%
Average Drawdown Average peak-to-trough decline	-9.62%	-11.33%	+1.71%
Ulcer Index Depth and duration of drawdowns from previous peaks	4.23%	3.44%	+0.79%

Volatility

VAW vs. FXZ - Volatility Comparison

The current volatility for Vanguard Materials ETF (VAW) is 6.78%, while First Trust Materials AlphaDEX Fund (FXZ) has a volatility of 7.83%. This indicates that VAW experiences smaller price fluctuations and is considered to be less risky than FXZ based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	VAW	FXZ	Difference
Volatility (1M) Calculated over the trailing 1-month period	6.78%	7.83%	-1.05%
Volatility (6M) Calculated over the trailing 6-month period	14.86%	17.24%	-2.38%
Volatility (1Y) Calculated over the trailing 1-year period	18.50%	22.77%	-4.27%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	19.72%	24.19%	-4.47%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	21.23%	24.93%	-3.70%

VAW vs. FXZ - Expense Ratio Comparison

VAW has a 0.09% expense ratio, which is lower than FXZ's 0.67% expense ratio.

Dividends

VAW vs. FXZ - Dividend Comparison

VAW's dividend yield for the trailing twelve months is around 1.39%, less than FXZ's 1.44% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
FXZ First Trust Materials AlphaDEX Fund	1.44%	1.74%	1.81%	1.97%	1.56%	1.11%	1.51%	1.58%	1.38%	1.01%	1.19%	1.26%
VAW Vanguard Materials ETF	1.39%	1.55%	1.70%	1.72%	1.98%	1.44%	1.67%	1.94%	2.03%	1.63%	1.67%	2.30%

Frequently Asked Questions

Can I hold both VAW and FXZ in my portfolio?

With a correlation of 0.94, VAW and FXZ move almost identically. Holding both adds very little diversification - you're essentially doubling your position in the same market segment. Choosing one is usually more capital-efficient.

Which is riskier, VAW or FXZ?

FXZ has higher volatility (7.83%) compared to VAW (6.78%). In terms of maximum drawdown, VAW dropped -62.17% vs FXZ's -65.46%.

Which ETF is better, VAW or FXZ?

On 10-year performance, FXZ leads with 11.46% vs 10.46% for VAW. On fees, VAW is cheaper at 0.09% per year. On volatility, VAW has been the lower-risk option at 6.78%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, VAW or FXZ?

Over the 10-year period, FXZ has performed better with a 11.46% return vs 10.46%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, VAW or FXZ?

VAW is cheaper with a 0.09% expense ratio, compared with 0.67% for FXZ.

Which ETF pays a higher dividend yield, VAW or FXZ?

FXZ has the higher dividend yield at 1.44%, compared with 1.39% for VAW.

What is the main difference between VAW and FXZ?

VAW tracks MSCI US Investable Market Materials 25/50 Index, while FXZ tracks StrataQuant Materials Index. They also come from different issuers: Vanguard and First Trust. Their fees differ too: 0.09% for VAW and 0.67% for FXZ.

Which has better risk-adjusted returns?

FXZ currently has the higher Sharpe Ratio (1.98 vs 1.13), 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.