VHT vs. XLF

Last updated Jun 14, 2026

VHT (Vanguard Health Care ETF) and XLF (State Street Financial Select Sector SPDR ETF) are both exchange-traded funds - VHT is a Health & Biotech Equities fund tracking the MSCI US Investable Market Health Care 25/50 Index, while XLF is a Financials Equities fund tracking the Financial Select Sector Index. Both are passively managed. Over the past 10 years, VHT returned 9.87%/yr vs 13.33%/yr for XLF. A 0.61 correlation means they provide meaningful diversification when combined. VHT charges 0.09%/yr vs 0.08%/yr for XLF.

Performance

VHT vs. XLF - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Vanguard Health Care ETF (VHT) and State Street Financial Select Sector SPDR ETF (XLF). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, VHT achieves a -0.11% return, which is significantly higher than XLF's -2.11% return. Over the past 10 years, VHT has underperformed XLF with an annualized return of 9.87%, while XLF has yielded a comparatively higher 13.33% annualized return.

VHT

• 1D: -0.12%
• 1M: 4.51%
• YTD: -0.11%
• 6M: 0.45%
• 1Y: 16.49%
• 3Y*: 7.19%
• 5Y*: 4.78%
• 10Y*: 9.87%

XLF

• 1D: 1.37%
• 1M: 4.00%
• YTD: -2.11%
• 6M: -2.09%
• 1Y: 8.41%
• 3Y*: 18.86%
• 5Y*: 9.15%
• 10Y*: 13.33%

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

VHT vs. XLF - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
VHT Vanguard Health Care ETF	-0.11%	15.46%	2.66%	2.52%	-5.60%	20.57%	18.29%	21.87%	5.58%	23.26%
XLF State Street Financial Select Sector SPDR ETF	-2.11%	14.90%	30.56%	12.03%	-10.59%	34.80%	-1.74%	31.88%	-13.06%	22.00%

Correlation

The correlation between VHT and XLF is 0.48, which is low. Their price movements are largely independent, making them effective diversification partners.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.48
Correlation (3Y) Calculated over the trailing 3-year period	0.55
Correlation (5Y) Calculated over the trailing 5-year period	0.58
Correlation (10Y) Calculated over the trailing 10-year period	0.54
Correlation (All Time) Calculated using the full available price history since Jan 30, 2004	0.61

The correlation between VHT and XLF shifts across timeframes, from 0.48 (1 year) to 0.61 (all time), reflecting how their relationship changes across market environments.

VHT vs. XLF - Sectors Allocation Comparison

Sectors	VHT	XLF
Healthcare	100.0%	-
Financial Services	0.0%	98.0%
Industrials	0.0%	0.2%
Technology	0.0%	1.8%
Basic Materials	-	-
Communication Services	-	-
Consumer Cyclical	-	-
Consumer Defensive	-	-
Energy	-	-
Real Estate	-	-
Utilities	-	-

Return for Risk

VHT vs. XLF — Risk / Return Rank

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

VHT

VHT Risk / Return Rank: 34
VHT Sharpe Ratio Rank: 34
VHT Sortino Ratio Rank: 37
VHT Omega Ratio Rank: 32
VHT Calmar Ratio Rank: 35
VHT Martin Ratio Rank: 30

XLF

XLF Risk / Return Rank: 15
XLF Sharpe Ratio Rank: 17
XLF Sortino Ratio Rank: 15
XLF Omega Ratio Rank: 15
XLF Calmar Ratio Rank: 15
XLF Martin Ratio Rank: 15

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.

VHT vs. XLF - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard Health Care ETF (VHT) and State Street Financial Select Sector SPDR ETF (XLF). 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.

	VHT	XLF	Difference
Sharpe ratio: Return per unit of total volatility	1.09	0.42	+0.66
Sortino ratio: Return per unit of downside risk	1.71	0.67	+1.04
Omega ratio: Gain probability vs. loss probability	1.19	1.08	+0.11
Calmar ratio: Return relative to maximum drawdown	1.53	0.42	+1.11
Martin ratio: Return relative to average drawdown	3.81	1.08	+2.73

VHT vs. XLF - Sharpe Ratio Comparison

The current VHT Sharpe Ratio is 1.09, which is higher than the XLF Sharpe Ratio of 0.42. The chart below compares the historical Sharpe Ratios of VHT and XLF, 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

VHT vs. XLF - Drawdown Comparison

The maximum VHT drawdown since its inception was -39.12%, smaller than the maximum XLF drawdown of -82.69%. Use the drawdown chart below to compare losses from any high point for VHT and XLF.

Drawdown Indicators

	VHT	XLF	Difference
Max Drawdown Largest peak-to-trough decline	-39.12%	-82.69%	+43.57%
Max Drawdown (1Y) Largest decline over 1 year	-10.40%	-14.79%	+4.39%
Max Drawdown (3Y) Largest decline over 3 years	-16.91%	-15.54%	-1.37%
Max Drawdown (5Y) Largest decline over 5 years	-17.71%	-25.81%	+8.10%
Max Drawdown (10Y) Largest decline over 10 years	-28.85%	-42.86%	+14.01%
Current Drawdown Current decline from peak	-3.28%	-4.94%	+1.66%
Average Drawdown Average peak-to-trough decline	-5.99%	-20.01%	+14.02%
Ulcer Index Depth and duration of drawdowns from previous peaks	4.19%	5.76%	-1.57%

Volatility

VHT vs. XLF - Volatility Comparison

Vanguard Health Care ETF (VHT) has a higher volatility of 4.88% compared to State Street Financial Select Sector SPDR ETF (XLF) at 4.23%. This indicates that VHT's price experiences larger fluctuations and is considered to be riskier than XLF based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	VHT	XLF	Difference
Volatility (1M) Calculated over the trailing 1-month period	4.88%	4.23%	+0.65%
Volatility (6M) Calculated over the trailing 6-month period	10.46%	11.26%	-0.80%
Volatility (1Y) Calculated over the trailing 1-year period	14.70%	14.69%	+0.01%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	15.01%	18.66%	-3.65%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	16.97%	22.17%	-5.20%

VHT vs. XLF - Expense Ratio Comparison

VHT has a 0.09% expense ratio, which is higher than XLF's 0.08% expense ratio. However, both funds are considered low-cost compared to the broader market, where average expense ratios usually range from 0.3% to 0.9%.

Dividends

VHT vs. XLF - Dividend Comparison

VHT's dividend yield for the trailing twelve months is around 1.64%, more than XLF's 1.49% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
VHT Vanguard Health Care ETF	1.64%	1.61%	1.53%	1.36%	1.33%	1.14%	1.21%	1.89%	1.38%	1.31%	1.45%	1.22%
XLF State Street Financial Select Sector SPDR ETF	1.49%	1.31%	1.42%	1.71%	2.04%	1.63%	2.03%	1.87%	2.08%	1.48%	21.10%	1.95%

Frequently Asked Questions

Can I hold both VHT and XLF in my portfolio?

VHT and XLF have a correlation of 0.48, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, VHT or XLF?

VHT has higher volatility (4.88%) compared to XLF (4.23%). In terms of maximum drawdown, VHT dropped -39.12% vs XLF's -82.69%.

Which ETF is better, VHT or XLF?

On 10-year performance, XLF leads with 13.33% vs 9.87% for VHT. On fees, XLF is cheaper at 0.08% per year. On volatility, XLF has been the lower-risk option at 4.23%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, VHT or XLF?

Over the 10-year period, XLF has performed better with a 13.33% return vs 9.87%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, VHT or XLF?

XLF is cheaper with a 0.08% expense ratio, compared with 0.09% for VHT.

Which ETF pays a higher dividend yield, VHT or XLF?

VHT has the higher dividend yield at 1.64%, compared with 1.49% for XLF.

What is the main difference between VHT and XLF?

VHT is categorized as Health & Biotech Equities, while XLF is Financials Equities. VHT tracks MSCI US Investable Market Health Care 25/50 Index, while XLF tracks Financial Select Sector Index. They also come from different issuers: Vanguard and State Street. Their fees differ too: 0.09% for VHT and 0.08% for XLF.

Which has better risk-adjusted returns?

VHT currently has the higher Sharpe Ratio (1.09 vs 0.42), 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.