VDE vs. XLE
Compare and contrast key facts about Vanguard Energy ETF (VDE) and Energy Select Sector SPDR Fund (XLE).
VDE and XLE are both exchange-traded funds (ETFs), meaning they are traded on stock exchanges and can be bought and sold throughout the day. VDE is a passively managed fund by Vanguard that tracks the performance of the MSCI US Investable Market Energy 25/50 Index. It was launched on Sep 23, 2004. XLE is a passively managed fund by State Street that tracks the performance of the Energy Select Sector Index. It was launched on Dec 16, 1998. Both VDE and XLE are passive ETFs, meaning that they are not actively managed but aim to replicate the performance of the underlying index as closely as possible.
Scroll down to visually compare performance, riskiness, drawdowns, and other indicators and decide which better suits your portfolio: VDE or XLE.
Key characteristics
| VDE | XLE | |
|---|---|---|
| YTD Return | 10.95% | 11.30% |
| 1Y Return | 24.14% | 22.61% |
| 3Y Return (Ann) | 27.30% | 27.22% |
| 5Y Return (Ann) | 12.89% | 12.96% |
| 10Y Return (Ann) | 3.04% | 3.73% |
| Sharpe Ratio | 1.21 | 1.14 |
| Daily Std Dev | 18.97% | 18.66% |
| Max Drawdown | -74.16% | -71.54% |
| Current Drawdown | -5.51% | -5.62% |
Correlation
The correlation between VDE and XLE is 0.99, which is considered to be high. That indicates a strong positive relationship between their price movements. Having highly-correlated positions in a portfolio may signal a lack of diversification, potentially leading to increased risk during market downturns.
Performance
VDE vs. XLE - Performance Comparison
The year-to-date returns for both investments are quite close, with VDE having a 10.95% return and XLE slightly higher at 11.30%. Over the past 10 years, VDE has underperformed XLE with an annualized return of 3.04%, while XLE has yielded a comparatively higher 3.73% annualized return. The chart below displays the growth of a $10,000 investment in both assets, with all prices adjusted for splits and dividends.
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VDE vs. XLE - Expense Ratio Comparison
VDE has a 0.10% expense ratio, which is lower than XLE's 0.13% 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%.
Risk-Adjusted Performance
VDE vs. XLE - Risk-Adjusted Performance Comparison
This table presents a comparison of risk-adjusted performance metrics for Vanguard Energy ETF (VDE) and Energy Select Sector SPDR Fund (XLE). 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.
Dividends
VDE vs. XLE - Dividend Comparison
VDE's dividend yield for the trailing twelve months is around 2.99%, less than XLE's 3.15% yield.
| TTM | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 | 2013 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
VDE Vanguard Energy ETF | 2.99% | 3.34% | 3.65% | 4.13% | 4.76% | 3.59% | 3.35% | 2.90% | 2.31% | 3.17% | 1.98% | 1.74% |
XLE Energy Select Sector SPDR Fund | 3.15% | 3.55% | 3.68% | 4.21% | 5.62% | 5.73% | 3.54% | 3.03% | 2.26% | 3.39% | 2.35% | 1.73% |
Drawdowns
VDE vs. XLE - Drawdown Comparison
The maximum VDE drawdown since its inception was -74.16%, roughly equal to the maximum XLE drawdown of -71.54%. Use the drawdown chart below to compare losses from any high point for VDE and XLE. For additional features, visit the drawdowns tool.
Volatility
VDE vs. XLE - Volatility Comparison
Vanguard Energy ETF (VDE) and Energy Select Sector SPDR Fund (XLE) have volatilities of 4.68% and 4.68%, 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.