VAW vs. VDE

Last updated Jun 24, 2026

VAW (Vanguard Materials ETF) and VDE (Vanguard Energy ETF) are both exchange-traded funds - VAW is a Materials fund tracking the MSCI US Investable Market Materials 25/50 Index, while VDE is a Energy Equities fund tracking the MSCI US Investable Market Energy 25/50 Index. Both are passively managed. Over the past 10 years, VAW returned 10.46%/yr vs 8.90%/yr for VDE. A 0.67 correlation means they provide meaningful diversification when combined. Both charge a 0.09% expense ratio.

Performance

VAW vs. VDE - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Vanguard Materials ETF (VAW) and Vanguard Energy ETF (VDE). 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 VDE's 23.55% return. Over the past 10 years, VAW has outperformed VDE with an annualized return of 10.46%, while VDE has yielded a comparatively lower 8.90% 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%

VDE

• 1D: 0.60%
• 1M: -7.94%
• YTD: 23.55%
• 6M: 24.06%
• 1Y: 31.01%
• 3Y*: 16.13%
• 5Y*: 18.74%
• 10Y*: 8.90%

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

VAW vs. VDE - 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%
VDE Vanguard Energy ETF	23.55%	7.11%	6.75%	0.03%	62.89%	56.31%	-33.02%	9.28%	-19.95%	-2.50%

Correlation

The correlation between VAW and VDE is 0.11, which is low. Their price movements are largely independent, making them effective diversification partners.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.11
Correlation (3Y) Calculated over the trailing 3-year period	0.33
Correlation (5Y) Calculated over the trailing 5-year period	0.45
Correlation (10Y) Calculated over the trailing 10-year period	0.55
Correlation (All Time) Calculated using the full available price history since Sep 29, 2004	0.67

Over the past year, the correlation between VAW and VDE has dropped to 0.11 - well below their long-term average of 0.67, suggesting their price drivers have been diverging.

VAW vs. VDE - Sectors Allocation Comparison

Sectors	VAW	VDE
Basic Materials	90.1%	0.4%
Consumer Cyclical	8.3%	-
Industrials	1.1%	0.1%
Healthcare	0.5%	-
Technology	0.1%	-
Consumer Defensive	0.0%	-
Energy	0.0%	99.5%
Communication Services	-	-
Financial Services	-	-
Real Estate	-	-
Utilities	-	-

Return for Risk

VAW vs. VDE — 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

VDE

VDE Risk / Return Rank: 43
VDE Sharpe Ratio Rank: 45
VDE Sortino Ratio Rank: 41
VDE Omega Ratio Rank: 40
VDE Calmar Ratio Rank: 45
VDE Martin Ratio Rank: 43

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. VDE - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard Materials ETF (VAW) and Vanguard Energy ETF (VDE). 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	VDE	Difference
Sharpe ratio: Return per unit of total volatility	1.13	1.51	-0.39
Sortino ratio: Return per unit of downside risk	1.65	2.04	-0.38
Omega ratio: Gain probability vs. loss probability	1.20	1.25	-0.05
Calmar ratio: Return relative to maximum drawdown	1.55	2.19	-0.65
Martin ratio: Return relative to average drawdown	4.90	6.75	-1.85

VAW vs. VDE - Sharpe Ratio Comparison

The current VAW Sharpe Ratio is 1.13, which is comparable to the VDE Sharpe Ratio of 1.51. The chart below compares the historical Sharpe Ratios of VAW and VDE, 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. VDE - Drawdown Comparison

The maximum VAW drawdown since its inception was -62.17%, smaller than the maximum VDE drawdown of -74.20%. Use the drawdown chart below to compare losses from any high point for VAW and VDE.

Drawdown Indicators

	VAW	VDE	Difference
Max Drawdown Largest peak-to-trough decline	-62.17%	-74.20%	+12.03%
Max Drawdown (1Y) Largest decline over 1 year	-13.42%	-14.20%	+0.78%
Max Drawdown (3Y) Largest decline over 3 years	-23.21%	-21.41%	-1.80%
Max Drawdown (5Y) Largest decline over 5 years	-25.50%	-26.58%	+1.08%
Max Drawdown (10Y) Largest decline over 10 years	-41.13%	-69.29%	+28.16%
Current Drawdown Current decline from peak	-5.58%	-12.59%	+7.01%
Average Drawdown Average peak-to-trough decline	-9.62%	-19.94%	+10.32%
Ulcer Index Depth and duration of drawdowns from previous peaks	4.23%	4.61%	-0.38%

Volatility

VAW vs. VDE - Volatility Comparison

Vanguard Materials ETF (VAW) and Vanguard Energy ETF (VDE) have volatilities of 6.78% and 7.06%, respectively, indicating that both stocks experience similar levels of price fluctuations. This suggests that the risk associated with both stocks, as measured by volatility, is nearly the same. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	VAW	VDE	Difference
Volatility (1M) Calculated over the trailing 1-month period	6.78%	7.06%	-0.28%
Volatility (6M) Calculated over the trailing 6-month period	14.86%	16.61%	-1.75%
Volatility (1Y) Calculated over the trailing 1-year period	18.50%	20.80%	-2.30%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	19.72%	26.37%	-6.65%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	21.23%	29.94%	-8.71%

VAW vs. VDE - Expense Ratio Comparison

Both VAW and VDE have an expense ratio of 0.09%, making them cost-effective options compared to the broader market, where average expense ratios typically range from 0.3% to 0.9%.

Dividends

VAW vs. VDE - Dividend Comparison

VAW's dividend yield for the trailing twelve months is around 1.39%, less than VDE's 2.54% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
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%
VDE Vanguard Energy ETF	2.54%	3.11%	3.23%	3.34%	3.65%	4.13%	4.76%	3.42%	3.35%	2.90%	2.31%	3.17%

Frequently Asked Questions

Can I hold both VAW and VDE in my portfolio?

VAW and VDE have a correlation of 0.11, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, VAW or VDE?

VDE has higher volatility (7.06%) compared to VAW (6.78%). In terms of maximum drawdown, VAW dropped -62.17% vs VDE's -74.20%.

Which ETF is better, VAW or VDE?

On 10-year performance, VAW leads with 10.46% vs 8.90% for VDE. Both ETFs have the same 0.09% expense ratio. 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 VDE?

Over the 10-year period, VAW has performed better with a 10.46% return vs 8.90%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, VAW or VDE?

VAW and VDE have the same expense ratio: 0.09% per year.

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

VDE has the higher dividend yield at 2.54%, compared with 1.39% for VAW.

What is the main difference between VAW and VDE?

VAW is categorized as Materials, while VDE is Energy Equities. VAW tracks MSCI US Investable Market Materials 25/50 Index, while VDE tracks MSCI US Investable Market Energy 25/50 Index.

Which has better risk-adjusted returns?

VDE currently has the higher Sharpe Ratio (1.51 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.