VEA vs. XLB

Last updated Jun 14, 2026

VEA (Vanguard FTSE Developed Markets ETF) and XLB (Materials Select Sector SPDR ETF) are both exchange-traded funds - VEA is a Foreign Large Cap Equities fund tracking the FTSE Developed All Cap ex US Index, while XLB is a Materials fund tracking the Materials Select Sector Index. Both are passively managed. Over the past 10 years, VEA returned 10.72%/yr vs 10.54%/yr for XLB. A 0.76 correlation means they provide meaningful diversification when combined. VEA charges 0.03%/yr vs 0.13%/yr for XLB.

Performance

VEA vs. XLB - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Vanguard FTSE Developed Markets ETF (VEA) and Materials Select Sector SPDR ETF (XLB). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, VEA achieves a 14.73% return, which is significantly lower than XLB's 15.57% return. Both investments have delivered pretty close results over the past 10 years, with VEA having a 10.72% annualized return and XLB not far behind at 10.54%.

VEA

• 1D: 0.34%
• 1M: 1.40%
• YTD: 14.73%
• 6M: 16.65%
• 1Y: 31.41%
• 3Y*: 19.03%
• 5Y*: 9.51%
• 10Y*: 10.72%

XLB

• 1D: 1.87%
• 1M: 0.99%
• YTD: 15.57%
• 6M: 16.68%
• 1Y: 21.77%
• 3Y*: 10.88%
• 5Y*: 6.01%
• 10Y*: 10.54%

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

VEA vs. XLB - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
VEA Vanguard FTSE Developed Markets ETF	14.73%	35.16%	3.15%	17.93%	-15.34%	11.66%	9.71%	22.62%	-14.75%	26.42%
XLB Materials Select Sector SPDR ETF	15.57%	9.94%	0.15%	12.46%	-12.30%	27.44%	20.46%	24.13%	-14.88%	24.01%

Correlation

The correlation between VEA and XLB is 0.66, which is moderate. They share some common price drivers but move independently often enough to provide real diversification benefit when combined.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.66
Correlation (3Y) Calculated over the trailing 3-year period	0.68
Correlation (5Y) Calculated over the trailing 5-year period	0.75
Correlation (10Y) Calculated over the trailing 10-year period	0.74
Correlation (All Time) Calculated using the full available price history since Jul 26, 2007	0.76

The correlation between VEA and XLB shifts across timeframes, from 0.66 (1 year) to 0.76 (all time), reflecting how their relationship changes across market environments.

VEA vs. XLB - Sectors Allocation Comparison

Sectors	VEA	XLB
Financial Services	23.3%	-
Industrials	19.2%	1.5%
Technology	13.8%	-
Healthcare	8.2%	-
Basic Materials	7.5%	87.3%
Consumer Cyclical	7.5%	12.7%
Consumer Defensive	5.6%	-
Energy	5.4%	-
Communication Services	3.4%	-
Utilities	3.3%	-
Real Estate	2.7%	-

Return for Risk

VEA vs. XLB — Risk / Return Rank

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

VEA

VEA Risk / Return Rank: 62
VEA Sharpe Ratio Rank: 63
VEA Sortino Ratio Rank: 62
VEA Omega Ratio Rank: 63
VEA Calmar Ratio Rank: 59
VEA Martin Ratio Rank: 63

XLB

XLB Risk / Return Rank: 37
XLB Sharpe Ratio Rank: 37
XLB Sortino Ratio Rank: 37
XLB Omega Ratio Rank: 34
XLB Calmar Ratio Rank: 38
XLB Martin Ratio Rank: 37

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.

VEA vs. XLB - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard FTSE Developed Markets ETF (VEA) and Materials Select Sector SPDR ETF (XLB). 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.

	VEA	XLB	Difference
Sharpe ratio: Return per unit of total volatility	1.81	1.17	+0.64
Sortino ratio: Return per unit of downside risk	2.50	1.73	+0.77
Omega ratio: Gain probability vs. loss probability	1.33	1.20	+0.13
Calmar ratio: Return relative to maximum drawdown	2.58	1.65	+0.93
Martin ratio: Return relative to average drawdown	9.92	5.05	+4.87

VEA vs. XLB - Sharpe Ratio Comparison

The current VEA Sharpe Ratio is 1.81, which is higher than the XLB Sharpe Ratio of 1.17. The chart below compares the historical Sharpe Ratios of VEA and XLB, 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

VEA vs. XLB - Drawdown Comparison

The maximum VEA drawdown since its inception was -60.68%, roughly equal to the maximum XLB drawdown of -59.83%. Use the drawdown chart below to compare losses from any high point for VEA and XLB.

Drawdown Indicators

	VEA	XLB	Difference
Max Drawdown Largest peak-to-trough decline	-60.68%	-59.83%	-0.85%
Max Drawdown (1Y) Largest decline over 1 year	-11.63%	-12.38%	+0.75%
Max Drawdown (3Y) Largest decline over 3 years	-13.45%	-23.17%	+9.72%
Max Drawdown (5Y) Largest decline over 5 years	-29.71%	-24.72%	-4.99%
Max Drawdown (10Y) Largest decline over 10 years	-35.73%	-37.27%	+1.54%
Current Drawdown Current decline from peak	-1.06%	-2.25%	+1.19%
Average Drawdown Average peak-to-trough decline	-13.28%	-10.83%	-2.45%
Ulcer Index Depth and duration of drawdowns from previous peaks	3.02%	4.04%	-1.02%

Volatility

VEA vs. XLB - Volatility Comparison

Vanguard FTSE Developed Markets ETF (VEA) and Materials Select Sector SPDR ETF (XLB) have volatilities of 6.84% and 7.05%, 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

	VEA	XLB	Difference
Volatility (1M) Calculated over the trailing 1-month period	6.84%	7.05%	-0.21%
Volatility (6M) Calculated over the trailing 6-month period	14.38%	13.58%	+0.80%
Volatility (1Y) Calculated over the trailing 1-year period	16.58%	17.49%	-0.91%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	16.72%	19.06%	-2.34%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	17.40%	20.70%	-3.30%

VEA vs. XLB - Expense Ratio Comparison

VEA has a 0.03% expense ratio, which is lower than XLB'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%.

Dividends

VEA vs. XLB - Dividend Comparison

VEA's dividend yield for the trailing twelve months is around 2.62%, more than XLB's 1.68% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
VEA Vanguard FTSE Developed Markets ETF	2.62%	3.22%	3.35%	3.15%	2.91%	3.16%	2.04%	3.04%	3.35%	2.77%	3.05%	2.92%
XLB Materials Select Sector SPDR ETF	1.68%	1.92%	1.92%	2.00%	2.26%	1.62%	1.72%	1.98%	2.20%	1.66%	1.95%	2.24%

Frequently Asked Questions

Can I hold both VEA and XLB in my portfolio?

VEA and XLB have a correlation of 0.66, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, VEA or XLB?

XLB has higher volatility (7.05%) compared to VEA (6.84%). In terms of maximum drawdown, VEA dropped -60.68% vs XLB's -59.83%.

Which ETF is better, VEA or XLB?

On 10-year performance, VEA leads with 10.72% vs 10.54% for XLB. On fees, VEA is cheaper at 0.03% per year. On volatility, VEA has been the lower-risk option at 6.84%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, VEA or XLB?

Over the 10-year period, VEA has performed better with a 10.72% return vs 10.54%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, VEA or XLB?

VEA is cheaper with a 0.03% expense ratio, compared with 0.13% for XLB.

Which ETF pays a higher dividend yield, VEA or XLB?

VEA has the higher dividend yield at 2.62%, compared with 1.68% for XLB.

What is the main difference between VEA and XLB?

VEA is categorized as Foreign Large Cap Equities, while XLB is Materials. VEA tracks FTSE Developed All Cap ex US Index, while XLB tracks Materials Select Sector Index. They also come from different issuers: Vanguard and State Street. Their fees differ too: 0.03% for VEA and 0.13% for XLB.

Which has better risk-adjusted returns?

VEA currently has the higher Sharpe Ratio (1.81 vs 1.17), 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.