VHT vs. XLY

Last updated Jun 13, 2026

VHT (Vanguard Health Care ETF) and XLY (Consumer Discretionary Select Sector SPDR Fund) are both exchange-traded funds - VHT is a Health & Biotech Equities fund tracking the MSCI US Investable Market Health Care 25/50 Index, while XLY is a Consumer Discretionary Equities fund tracking the Consumer Discretionary Select Sector Index. Both are passively managed. Over the past 10 years, VHT returned 9.87%/yr vs 12.78%/yr for XLY. A 0.64 correlation means they provide meaningful diversification when combined. VHT charges 0.09%/yr vs 0.13%/yr for XLY.

Performance

VHT vs. XLY - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Vanguard Health Care ETF (VHT) and Consumer Discretionary Select Sector SPDR Fund (XLY). 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 XLY's -2.16% return. Over the past 10 years, VHT has underperformed XLY with an annualized return of 9.87%, while XLY has yielded a comparatively higher 12.78% 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%

XLY

• 1D: 0.26%
• 1M: -1.74%
• YTD: -2.16%
• 6M: -3.01%
• 1Y: 11.01%
• 3Y*: 12.99%
• 5Y*: 7.00%
• 10Y*: 12.78%

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

VHT vs. XLY - 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%
XLY Consumer Discretionary Select Sector SPDR Fund	-2.16%	7.37%	26.51%	39.64%	-36.27%	27.93%	29.63%	28.39%	1.58%	22.82%

Correlation

The correlation between VHT and XLY is 0.36, which is low. Their price movements are largely independent, making them effective diversification partners.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.36
Correlation (3Y) Calculated over the trailing 3-year period	0.43
Correlation (5Y) Calculated over the trailing 5-year period	0.50
Correlation (10Y) Calculated over the trailing 10-year period	0.55
Correlation (All Time) Calculated using the full available price history since Jan 30, 2004	0.64

Over the past year, the correlation between VHT and XLY has dropped to 0.36 - well below their long-term average of 0.64, suggesting their price drivers have been diverging.

VHT vs. XLY - Sectors Allocation Comparison

Sectors	VHT	XLY
Healthcare	100.0%	-
Financial Services	0.0%	-
Industrials	0.0%	0.1%
Technology	0.0%	0.9%
Basic Materials	-	-
Communication Services	-	1.3%
Consumer Cyclical	-	97.6%
Consumer Defensive	-	-
Energy	-	-
Real Estate	-	-
Utilities	-	-

Return for Risk

VHT vs. XLY — 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

XLY

XLY Risk / Return Rank: 19
XLY Sharpe Ratio Rank: 19
XLY Sortino Ratio Rank: 19
XLY Omega Ratio Rank: 18
XLY Calmar Ratio Rank: 19
XLY Martin Ratio Rank: 20

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. XLY - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard Health Care ETF (VHT) and Consumer Discretionary Select Sector SPDR Fund (XLY). 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	XLY	Difference
Sharpe ratio: Return per unit of total volatility	1.09	0.55	+0.54
Sortino ratio: Return per unit of downside risk	1.71	0.89	+0.82
Omega ratio: Gain probability vs. loss probability	1.19	1.10	+0.09
Calmar ratio: Return relative to maximum drawdown	1.53	0.67	+0.87
Martin ratio: Return relative to average drawdown	3.81	2.05	+1.76

VHT vs. XLY - Sharpe Ratio Comparison

The current VHT Sharpe Ratio is 1.09, which is higher than the XLY Sharpe Ratio of 0.55. The chart below compares the historical Sharpe Ratios of VHT and XLY, 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. XLY - Drawdown Comparison

The maximum VHT drawdown since its inception was -39.12%, smaller than the maximum XLY drawdown of -59.05%. Use the drawdown chart below to compare losses from any high point for VHT and XLY.

Drawdown Indicators

	VHT	XLY	Difference
Max Drawdown Largest peak-to-trough decline	-39.12%	-59.05%	+19.93%
Max Drawdown (1Y) Largest decline over 1 year	-10.40%	-14.98%	+4.58%
Max Drawdown (3Y) Largest decline over 3 years	-16.91%	-26.01%	+9.10%
Max Drawdown (5Y) Largest decline over 5 years	-17.71%	-39.67%	+21.96%
Max Drawdown (10Y) Largest decline over 10 years	-28.85%	-39.67%	+10.82%
Current Drawdown Current decline from peak	-3.28%	-6.17%	+2.89%
Average Drawdown Average peak-to-trough decline	-5.99%	-9.55%	+3.56%
Ulcer Index Depth and duration of drawdowns from previous peaks	4.19%	4.88%	-0.69%

Volatility

VHT vs. XLY - Volatility Comparison

The current volatility for Vanguard Health Care ETF (VHT) is 4.88%, while Consumer Discretionary Select Sector SPDR Fund (XLY) has a volatility of 6.19%. This indicates that VHT experiences smaller price fluctuations and is considered to be less risky than XLY based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	VHT	XLY	Difference
Volatility (1M) Calculated over the trailing 1-month period	4.88%	6.19%	-1.31%
Volatility (6M) Calculated over the trailing 6-month period	10.46%	13.44%	-2.98%
Volatility (1Y) Calculated over the trailing 1-year period	14.70%	18.27%	-3.57%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	15.01%	23.83%	-8.82%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	16.97%	22.08%	-5.11%

VHT vs. XLY - Expense Ratio Comparison

VHT has a 0.09% expense ratio, which is lower than XLY'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

VHT vs. XLY - Dividend Comparison

VHT's dividend yield for the trailing twelve months is around 1.64%, more than XLY's 0.77% 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%
XLY Consumer Discretionary Select Sector SPDR Fund	0.77%	0.79%	0.72%	0.78%	1.00%	0.53%	0.82%	1.28%	1.34%	1.20%	1.71%	1.43%

Frequently Asked Questions

Can I hold both VHT and XLY in my portfolio?

VHT and XLY have a correlation of 0.36, 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 XLY?

XLY has higher volatility (6.19%) compared to VHT (4.88%). In terms of maximum drawdown, VHT dropped -39.12% vs XLY's -59.05%.

Which ETF is better, VHT or XLY?

On 10-year performance, XLY leads with 12.78% vs 9.87% for VHT. On fees, VHT is cheaper at 0.09% per year. On volatility, VHT has been the lower-risk option at 4.88%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, VHT or XLY?

Over the 10-year period, XLY has performed better with a 12.78% 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 XLY?

VHT is cheaper with a 0.09% expense ratio, compared with 0.13% for XLY.

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

VHT has the higher dividend yield at 1.64%, compared with 0.77% for XLY.

What is the main difference between VHT and XLY?

VHT is categorized as Health & Biotech Equities, while XLY is Consumer Discretionary Equities. VHT tracks MSCI US Investable Market Health Care 25/50 Index, while XLY tracks Consumer Discretionary Select Sector Index. They also come from different issuers: Vanguard and State Street. Their fees differ too: 0.09% for VHT and 0.13% for XLY.

Which has better risk-adjusted returns?

VHT currently has the higher Sharpe Ratio (1.09 vs 0.55), 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.