VEA vs. XLE

Last updated Jun 9, 2026

VEA (Vanguard FTSE Developed Markets ETF) and XLE (State Street Energy 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 XLE is a Energy Equities fund tracking the Energy Select Sector Index. Both are passively managed. Over the past 10 years, VEA returned 10.14%/yr vs 10.02%/yr for XLE. A 0.60 correlation means they provide meaningful diversification when combined. VEA charges 0.03%/yr vs 0.08%/yr for XLE.

Performance

VEA vs. XLE - Performance Comparison

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

Returns By Period

In the year-to-date period, VEA achieves a 12.02% return, which is significantly lower than XLE's 31.32% return. Both investments have delivered pretty close results over the past 10 years, with VEA having a 10.14% annualized return and XLE not far behind at 10.02%.

VEA

• 1D: 1.00%
• 1M: -1.37%
• YTD: 12.02%
• 6M: 14.95%
• 1Y: 28.06%
• 3Y*: 18.65%
• 5Y*: 9.09%
• 10Y*: 10.14%

XLE

• 1D: 1.14%
• 1M: 4.72%
• YTD: 31.32%
• 6M: 30.37%
• 1Y: 44.35%
• 3Y*: 16.51%
• 5Y*: 20.33%
• 10Y*: 10.02%

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

VEA vs. XLE - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
VEA Vanguard FTSE Developed Markets ETF	12.02%	35.16%	3.15%	17.93%	-15.34%	11.66%	9.71%	22.62%	-14.75%	26.42%
XLE State Street Energy Select Sector SPDR ETF	31.32%	7.88%	5.56%	-0.63%	64.32%	53.28%	-32.67%	11.74%	-18.22%	-0.89%

Correlation

The correlation between VEA and XLE is -0.03, meaning there is essentially no relationship between their price movements. Each responds to its own set of market drivers, making them strong candidates for combining in a diversified portfolio.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	-0.03
Correlation (3Y) Calculated over the trailing 3-year period	0.20
Correlation (5Y) Calculated over the trailing 5-year period	0.33
Correlation (10Y) Calculated over the trailing 10-year period	0.46
Correlation (All Time) Calculated using the full available price history since Jul 26, 2007	0.60

The correlation between VEA and XLE shifts across timeframes, from -0.03 (1 year) to 0.60 (all time), reflecting how their relationship changes across market environments.

VEA vs. XLE - Sectors Allocation Comparison

Sectors	VEA	XLE
Financial Services	23.3%	-
Industrials	19.2%	-
Technology	13.8%	-
Healthcare	8.2%	-
Basic Materials	7.5%	-
Consumer Cyclical	7.5%	-
Consumer Defensive	5.6%	-
Energy	5.4%	100.0%
Communication Services	3.4%	-
Utilities	3.3%	-
Real Estate	2.7%	-

Return for Risk

VEA vs. XLE — Risk / Return Rank

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

VEA

VEA Risk / Return Rank: 56
VEA Sharpe Ratio Rank: 57
VEA Sortino Ratio Rank: 55
VEA Omega Ratio Rank: 57
VEA Calmar Ratio Rank: 54
VEA Martin Ratio Rank: 58

XLE

XLE Risk / Return Rank: 70
XLE Sharpe Ratio Rank: 75
XLE Sortino Ratio Rank: 68
XLE Omega Ratio Rank: 65
XLE Calmar Ratio Rank: 79
XLE Martin Ratio Rank: 64

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. XLE - Risk-Adjusted Trends Comparison

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

	VEA	XLE	Difference
Sharpe ratio: Return per unit of total volatility	1.75	2.18	-0.43
Sortino ratio: Return per unit of downside risk	2.39	2.81	-0.42
Omega ratio: Gain probability vs. loss probability	1.32	1.35	-0.03
Calmar ratio: Return relative to maximum drawdown	2.42	3.70	-1.27
Martin ratio: Return relative to average drawdown	9.39	10.59	-1.20
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

VEA vs. XLE - Sharpe Ratio Comparison

The current VEA Sharpe Ratio is 1.75, which is comparable to the XLE Sharpe Ratio of 2.18. The chart below compares the historical Sharpe Ratios of VEA and XLE, 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

	VEA	XLE	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	1.75	2.18	-0.43
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	0.55	0.79	-0.24
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	0.59	0.34	+0.25
Sharpe Ratio (All Time) Calculated using the full available price history	0.24	0.31	-0.07

Drawdowns

VEA vs. XLE - Drawdown Comparison

The maximum VEA drawdown since its inception was -60.68%, smaller than the maximum XLE drawdown of -71.26%. Use the drawdown chart below to compare losses from any high point for VEA and XLE.

Drawdown Indicators

	VEA	XLE	Difference
Max Drawdown Largest peak-to-trough decline	-60.68%	-71.26%	+10.58%
Max Drawdown (1Y) Largest decline over 1 year	-11.63%	-12.05%	+0.42%
Max Drawdown (3Y) Largest decline over 3 years	-13.45%	-20.14%	+6.69%
Max Drawdown (5Y) Largest decline over 5 years	-29.71%	-26.04%	-3.67%
Max Drawdown (10Y) Largest decline over 10 years	-35.73%	-66.81%	+31.08%
Current Drawdown Current decline from peak	-3.40%	-6.76%	+3.36%
Average Drawdown Average peak-to-trough decline	-13.29%	-17.98%	+4.69%
Ulcer Index Depth and duration of drawdowns from previous peaks	3.00%	4.20%	-1.20%

Volatility

VEA vs. XLE - Volatility Comparison

The current volatility for Vanguard FTSE Developed Markets ETF (VEA) is 6.03%, while State Street Energy Select Sector SPDR ETF (XLE) has a volatility of 7.07%. This indicates that VEA experiences smaller price fluctuations and is considered to be less risky than XLE based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	VEA	XLE	Difference
Volatility (1M) Calculated over the trailing 1-month period	6.03%	7.07%	-1.04%
Volatility (6M) Calculated over the trailing 6-month period	13.91%	16.58%	-2.67%
Volatility (1Y) Calculated over the trailing 1-year period	16.15%	20.48%	-4.33%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	16.63%	26.03%	-9.40%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	17.40%	29.58%	-12.18%

VEA vs. XLE - Expense Ratio Comparison

VEA has a 0.03% expense ratio, which is lower than XLE's 0.08% 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. XLE - Dividend Comparison

VEA's dividend yield for the trailing twelve months is around 2.69%, more than XLE's 2.56% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
VEA Vanguard FTSE Developed Markets ETF	2.69%	3.22%	3.35%	3.15%	2.91%	3.16%	2.04%	3.04%	3.35%	2.77%	3.05%	2.92%
XLE State Street Energy Select Sector SPDR ETF	2.56%	3.28%	3.36%	3.55%	3.68%	4.21%	5.62%	6.72%	3.54%	3.03%	2.26%	3.39%

Frequently Asked Questions

Can I hold both VEA and XLE in my portfolio?

VEA and XLE have a correlation of -0.03, 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 XLE?

XLE has higher volatility (7.07%) compared to VEA (6.03%). In terms of maximum drawdown, VEA dropped -60.68% vs XLE's -71.26%.

Which ETF is better, VEA or XLE?

On 10-year performance, VEA leads with 10.14% vs 10.02% for XLE. On fees, VEA is cheaper at 0.03% per year. On volatility, VEA has been the lower-risk option at 6.03%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, VEA or XLE?

Over the 10-year period, VEA has performed better with a 10.14% return vs 10.02%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, VEA or XLE?

VEA is cheaper with a 0.03% expense ratio, compared with 0.08% for XLE.

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

VEA has the higher dividend yield at 2.69%, compared with 2.56% for XLE.

What is the main difference between VEA and XLE?

VEA is categorized as Foreign Large Cap Equities, while XLE is Energy Equities. VEA tracks FTSE Developed All Cap ex US Index, while XLE tracks Energy Select Sector Index. They also come from different issuers: Vanguard and State Street. Their fees differ too: 0.03% for VEA and 0.08% for XLE.

Which has better risk-adjusted returns?

XLE currently has the higher Sharpe Ratio (2.18 vs 1.75), 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.