VDE vs. VAW

Last updated Jun 4, 2026

VDE (Vanguard Energy ETF) and VAW (Vanguard Materials ETF) are both exchange-traded funds - VDE is a Energy Equities fund tracking the MSCI US Investable Market Energy 25/50 Index, while VAW is a Materials fund tracking the MSCI US Investable Market Materials 25/50 Index. Both are passively managed. Over the past 10 years, VDE returned 9.70%/yr vs 10.35%/yr for VAW. A 0.67 correlation means they provide meaningful diversification when combined. VDE charges 0.09%/yr vs 0.10%/yr for VAW.

Performance

VDE vs. VAW - Performance Comparison

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

Returns By Period

In the year-to-date period, VDE achieves a 32.24% return, which is significantly higher than VAW's 13.17% return. Over the past 10 years, VDE has underperformed VAW with an annualized return of 9.70%, while VAW has yielded a comparatively higher 10.35% annualized return.

VDE

• 1D: 1.13%
• 1M: -2.17%
• YTD: 32.24%
• 6M: 29.32%
• 1Y: 45.53%
• 3Y*: 17.97%
• 5Y*: 20.43%
• 10Y*: 9.70%

VAW

• 1D: -0.23%
• 1M: 2.57%
• YTD: 13.17%
• 6M: 16.23%
• 1Y: 22.68%
• 3Y*: 12.47%
• 5Y*: 5.80%
• 10Y*: 10.35%

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

VDE vs. VAW - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
VDE Vanguard Energy ETF	32.24%	7.11%	6.75%	0.03%	62.89%	56.31%	-33.02%	9.28%	-19.95%	-2.50%
VAW Vanguard Materials ETF	13.17%	12.30%	0.48%	13.67%	-11.80%	27.43%	19.44%	23.53%	-17.49%	23.76%

Correlation

The correlation between VDE and VAW 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	0.35
Correlation (5Y) Calculated over the trailing 5-year period	0.47
Correlation (10Y) Calculated over the trailing 10-year period	0.56
Correlation (All Time) Calculated using the full available price history since Sep 30, 2004	0.67

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

VDE vs. VAW - Sectors Allocation Comparison

Sectors	VDE	VAW
Energy	99.5%	0.5%
Basic Materials	0.4%	90.2%
Industrials	0.1%	1.0%
Communication Services	-	-
Consumer Cyclical	-	8.3%
Consumer Defensive	-	0.0%
Financial Services	-	-
Healthcare	-	0.5%
Real Estate	-	-
Technology	-	0.1%
Utilities	-	-

Return for Risk

VDE vs. VAW — Risk / Return Rank

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

VDE

VDE Risk / Return Rank: 64
VDE Sharpe Ratio Rank: 66
VDE Sortino Ratio Rank: 60
VDE Omega Ratio Rank: 57
VDE Calmar Ratio Rank: 75
VDE Martin Ratio Rank: 62

VAW

VAW Risk / Return Rank: 34
VAW Sharpe Ratio Rank: 35
VAW Sortino Ratio Rank: 34
VAW Omega Ratio Rank: 33
VAW Calmar Ratio Rank: 34
VAW Martin Ratio Rank: 35

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.

VDE vs. VAW - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard Energy ETF (VDE) and Vanguard Materials ETF (VAW). 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.

	VDE	VAW	Difference
Sharpe ratio: Return per unit of total volatility	2.25	1.29	+0.96
Sortino ratio: Return per unit of downside risk	2.88	1.86	+1.02
Omega ratio: Gain probability vs. loss probability	1.36	1.22	+0.14
Calmar ratio: Return relative to maximum drawdown	3.88	1.70	+2.18
Martin ratio: Return relative to average drawdown	11.42	5.56	+5.86
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

VDE vs. VAW - Sharpe Ratio Comparison

The current VDE Sharpe Ratio is 2.25, which is higher than the VAW Sharpe Ratio of 1.29. The chart below compares the historical Sharpe Ratios of VDE and VAW, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Sharpe Ratios by Period

	VDE	VAW	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	2.25	1.29	+0.96
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	0.78	0.30	+0.48
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	0.33	0.49	-0.16
Sharpe Ratio (All Time) Calculated using the full available price history	0.28	0.39	-0.11

Drawdowns

VDE vs. VAW - Drawdown Comparison

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

Drawdown Indicators

	VDE	VAW	Difference
Max Drawdown Largest peak-to-trough decline	-74.20%	-62.17%	-12.03%
Max Drawdown (1Y) Largest decline over 1 year	-11.80%	-13.42%	+1.62%
Max Drawdown (3Y) Largest decline over 3 years	-21.41%	-23.21%	+1.80%
Max Drawdown (5Y) Largest decline over 5 years	-26.58%	-25.50%	-1.08%
Max Drawdown (10Y) Largest decline over 10 years	-69.29%	-41.13%	-28.16%
Current Drawdown Current decline from peak	-6.43%	-3.79%	-2.64%
Average Drawdown Average peak-to-trough decline	-19.96%	-9.63%	-10.33%
Ulcer Index Depth and duration of drawdowns from previous peaks	4.00%	4.09%	-0.09%

Volatility

VDE vs. VAW - Volatility Comparison

Vanguard Energy ETF (VDE) has a higher volatility of 7.99% compared to Vanguard Materials ETF (VAW) at 6.08%. This indicates that VDE's price experiences larger fluctuations and is considered to be riskier than VAW based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	VDE	VAW	Difference
Volatility (1M) Calculated over the trailing 1-month period	7.99%	6.08%	+1.91%
Volatility (6M) Calculated over the trailing 6-month period	16.33%	13.93%	+2.40%
Volatility (1Y) Calculated over the trailing 1-year period	20.38%	17.65%	+2.73%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	26.40%	19.62%	+6.78%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	29.93%	21.20%	+8.73%

VDE vs. VAW - Expense Ratio Comparison

VDE has a 0.09% expense ratio, which is lower than VAW's 0.10% expense ratio. Despite the difference, both funds are considered low-cost compared to the broader market, where average expense ratios usually range from 0.3% to 0.9%.

Dividends

VDE vs. VAW - Dividend Comparison

VDE's dividend yield for the trailing twelve months is around 2.37%, more than VAW's 1.36% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
VAW Vanguard Materials ETF	1.36%	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	2.37%	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 VDE and VAW in my portfolio?

VDE and VAW 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, VDE or VAW?

VDE has higher volatility (7.99%) compared to VAW (6.08%). In terms of maximum drawdown, VDE dropped -74.20% vs VAW's -62.17%.

Which ETF is better, VDE or VAW?

On 10-year performance, VAW leads with 10.35% vs 9.70% for VDE. On fees, VDE is cheaper at 0.09% per year. On volatility, VAW has been the lower-risk option at 6.08%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, VDE or VAW?

Over the 10-year period, VAW has performed better with a 10.35% return vs 9.70%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, VDE or VAW?

VDE is cheaper with a 0.09% expense ratio, compared with 0.10% for VAW.

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

VDE has the higher dividend yield at 2.37%, compared with 1.36% for VAW.

What is the main difference between VDE and VAW?

VDE is categorized as Energy Equities, while VAW is Materials. VDE tracks MSCI US Investable Market Energy 25/50 Index, while VAW tracks MSCI US Investable Market Materials 25/50 Index. Their fees differ too: 0.09% for VDE and 0.10% for VAW.

Which has better risk-adjusted returns?

VDE currently has the higher Sharpe Ratio (2.25 vs 1.29), 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.