VDE vs. XOP

Last updated Jun 24, 2026

VDE (Vanguard Energy ETF) and XOP (SPDR S&P Oil & Gas Exploration & Production ETF) are both Energy Equities funds - VDE tracks the MSCI US Investable Market Energy 25/50 Index while XOP tracks the S&P Oil & Gas Exploration & Production Select Industry. Both are passively managed. Over the past 10 years, VDE returned 8.90%/yr vs 3.09%/yr for XOP. Their correlation of 0.93 suggests significant overlap in exposure. VDE charges 0.09%/yr vs 0.35%/yr for XOP.

Performance

VDE vs. XOP - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Vanguard Energy ETF (VDE) and SPDR S&P Oil & Gas Exploration & Production ETF (XOP). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

The year-to-date returns for both investments are quite close, with VDE having a 23.55% return and XOP slightly higher at 23.89%. Over the past 10 years, VDE has outperformed XOP with an annualized return of 8.90%, while XOP has yielded a comparatively lower 3.09% annualized return.

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%

XOP

• 1D: 0.09%
• 1M: -9.39%
• YTD: 23.89%
• 6M: 23.68%
• 1Y: 23.02%
• 3Y*: 11.00%
• 5Y*: 12.14%
• 10Y*: 3.09%

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

VDE vs. XOP - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
VDE Vanguard Energy ETF	23.55%	7.11%	6.75%	0.03%	62.89%	56.31%	-33.02%	9.28%	-19.95%	-2.50%
XOP SPDR S&P Oil & Gas Exploration & Production ETF	23.89%	-2.15%	-1.00%	3.56%	45.37%	66.74%	-36.40%	-9.44%	-28.10%	-9.47%

Correlation

The correlation between VDE and XOP is 0.91, 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	0.91
Correlation (3Y) Calculated over the trailing 3-year period	0.92
Correlation (5Y) Calculated over the trailing 5-year period	0.94
Correlation (10Y) Calculated over the trailing 10-year period	0.93
Correlation (All Time) Calculated using the full available price history since Jun 22, 2006	0.93

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

VDE vs. XOP - Sectors Allocation Comparison

Sectors	VDE	XOP
Energy	99.5%	96.8%
Basic Materials	0.4%	3.2%
Industrials	0.1%	-
Communication Services	-	-
Consumer Cyclical	-	-
Consumer Defensive	-	-
Financial Services	-	-
Healthcare	-	-
Real Estate	-	-
Technology	-	-
Utilities	-	-

Return for Risk

VDE vs. XOP — Risk / Return Rank

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

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

XOP

XOP Risk / Return Rank: 24
XOP Sharpe Ratio Rank: 24
XOP Sortino Ratio Rank: 23
XOP Omega Ratio Rank: 22
XOP Calmar Ratio Rank: 26
XOP Martin Ratio Rank: 27

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. XOP - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard Energy ETF (VDE) and SPDR S&P Oil & Gas Exploration & Production ETF (XOP). 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.

	VDE	XOP	Difference
Sharpe ratio: Return per unit of total volatility	1.51	0.82	+0.69
Sortino ratio: Return per unit of downside risk	2.04	1.23	+0.80
Omega ratio: Gain probability vs. loss probability	1.25	1.15	+0.10
Calmar ratio: Return relative to maximum drawdown	2.19	1.25	+0.94
Martin ratio: Return relative to average drawdown	6.75	3.50	+3.26

VDE vs. XOP - Sharpe Ratio Comparison

The current VDE Sharpe Ratio is 1.51, which is higher than the XOP Sharpe Ratio of 0.82. The chart below compares the historical Sharpe Ratios of VDE and XOP, 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

VDE vs. XOP - Drawdown Comparison

The maximum VDE drawdown since its inception was -74.20%, smaller than the maximum XOP drawdown of -90.27%. Use the drawdown chart below to compare losses from any high point for VDE and XOP.

Drawdown Indicators

	VDE	XOP	Difference
Max Drawdown Largest peak-to-trough decline	-74.20%	-90.27%	+16.07%
Max Drawdown (1Y) Largest decline over 1 year	-14.20%	-18.50%	+4.30%
Max Drawdown (3Y) Largest decline over 3 years	-21.41%	-34.98%	+13.57%
Max Drawdown (5Y) Largest decline over 5 years	-26.58%	-34.98%	+8.40%
Max Drawdown (10Y) Largest decline over 10 years	-69.29%	-82.61%	+13.32%
Current Drawdown Current decline from peak	-12.59%	-42.09%	+29.50%
Average Drawdown Average peak-to-trough decline	-19.94%	-42.58%	+22.64%
Ulcer Index Depth and duration of drawdowns from previous peaks	4.61%	6.60%	-1.99%

Volatility

VDE vs. XOP - Volatility Comparison

The current volatility for Vanguard Energy ETF (VDE) is 7.06%, while SPDR S&P Oil & Gas Exploration & Production ETF (XOP) has a volatility of 9.01%. This indicates that VDE experiences smaller price fluctuations and is considered to be less risky than XOP based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	VDE	XOP	Difference
Volatility (1M) Calculated over the trailing 1-month period	7.06%	9.01%	-1.95%
Volatility (6M) Calculated over the trailing 6-month period	16.61%	21.96%	-5.35%
Volatility (1Y) Calculated over the trailing 1-year period	20.80%	28.30%	-7.50%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	26.37%	33.88%	-7.51%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	29.94%	40.25%	-10.31%

VDE vs. XOP - Expense Ratio Comparison

VDE has a 0.09% expense ratio, which is lower than XOP's 0.35% expense ratio.

Dividends

VDE vs. XOP - Dividend Comparison

VDE's dividend yield for the trailing twelve months is around 2.54%, more than XOP's 2.10% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
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%
XOP SPDR S&P Oil & Gas Exploration & Production ETF	2.10%	2.62%	2.45%	2.63%	2.47%	1.61%	2.34%	1.47%	0.99%	0.76%	0.76%	2.21%

Frequently Asked Questions

Can I hold both VDE and XOP in my portfolio?

With a correlation of 0.91, VDE and XOP 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, VDE or XOP?

XOP has higher volatility (9.01%) compared to VDE (7.06%). In terms of maximum drawdown, VDE dropped -74.20% vs XOP's -90.27%.

Which ETF is better, VDE or XOP?

On 10-year performance, VDE leads with 8.90% vs 3.09% for XOP. On fees, VDE is cheaper at 0.09% per year. On volatility, VDE has been the lower-risk option at 7.06%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, VDE or XOP?

Over the 10-year period, VDE has performed better with a 8.90% return vs 3.09%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, VDE or XOP?

VDE is cheaper with a 0.09% expense ratio, compared with 0.35% for XOP.

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

VDE has the higher dividend yield at 2.54%, compared with 2.10% for XOP.

What is the main difference between VDE and XOP?

VDE tracks MSCI US Investable Market Energy 25/50 Index, while XOP tracks S&P Oil & Gas Exploration & Production Select Industry. They also come from different issuers: Vanguard and State Street. Their fees differ too: 0.09% for VDE and 0.35% for XOP.

Which has better risk-adjusted returns?

VDE currently has the higher Sharpe Ratio (1.51 vs 0.82), 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.