VPU vs. XLF

Last updated Jun 9, 2026

VPU (Vanguard Utilities ETF) and XLF (State Street Financial Select Sector SPDR ETF) are both exchange-traded funds - VPU is a Utilities Equities fund tracking the MSCI US Investable Market Utilities 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, VPU returned 8.85%/yr vs 12.79%/yr for XLF. At a 0.42 correlation, their price movements are largely independent. VPU charges 0.09%/yr vs 0.08%/yr for XLF.

Performance

VPU vs. XLF - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Vanguard Utilities ETF (VPU) 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, VPU achieves a 2.68% return, which is significantly higher than XLF's -4.62% return. Over the past 10 years, VPU has underperformed XLF with an annualized return of 8.85%, while XLF has yielded a comparatively higher 12.79% annualized return.

VPU

• 1D: -1.87%
• 1M: -2.65%
• YTD: 2.68%
• 6M: 3.11%
• 1Y: 10.68%
• 3Y*: 12.74%
• 5Y*: 8.91%
• 10Y*: 8.85%

XLF

• 1D: -0.63%
• 1M: 1.42%
• YTD: -4.62%
• 6M: -1.98%
• 1Y: 2.91%
• 3Y*: 18.06%
• 5Y*: 8.47%
• 10Y*: 12.79%

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

VPU vs. XLF - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
VPU Vanguard Utilities ETF	2.68%	16.46%	23.04%	-7.45%	1.06%	17.40%	-0.74%	24.89%	4.38%	12.44%
XLF State Street Financial Select Sector SPDR ETF	-4.62%	14.90%	30.56%	12.03%	-10.59%	34.80%	-1.74%	31.88%	-13.06%	22.00%

Correlation

The correlation between VPU and XLF is 0.19, which is low. Their price movements are largely independent, making them effective diversification partners.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.19
Correlation (3Y) Calculated over the trailing 3-year period	0.37
Correlation (5Y) Calculated over the trailing 5-year period	0.40
Correlation (10Y) Calculated over the trailing 10-year period	0.30
Correlation (All Time) Calculated using the full available price history since Feb 2, 2004	0.42

Over the past year, the correlation between VPU and XLF has dropped to 0.19 - well below their long-term average of 0.42, suggesting their price drivers have been diverging.

VPU vs. XLF - Sectors Allocation Comparison

Sectors	VPU	XLF
Utilities	99.3%	-
Energy	0.5%	-
Industrials	0.2%	0.2%
Basic Materials	-	-
Communication Services	-	-
Consumer Cyclical	-	-
Consumer Defensive	-	-
Financial Services	-	98.0%
Healthcare	-	-
Real Estate	-	-
Technology	-	1.8%

Return for Risk

VPU vs. XLF — Risk / Return Rank

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

VPU

VPU Risk / Return Rank: 23
VPU Sharpe Ratio Rank: 23
VPU Sortino Ratio Rank: 22
VPU Omega Ratio Rank: 22
VPU Calmar Ratio Rank: 27
VPU Martin Ratio Rank: 22

XLF

XLF Risk / Return Rank: 12
XLF Sharpe Ratio Rank: 12
XLF Sortino Ratio Rank: 12
XLF Omega Ratio Rank: 12
XLF Calmar Ratio Rank: 12
XLF Martin Ratio Rank: 12

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.

VPU vs. XLF - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard Utilities ETF (VPU) 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.

	VPU	XLF	Difference
Sharpe ratio: Return per unit of total volatility	0.75	0.20	+0.55
Sortino ratio: Return per unit of downside risk	1.09	0.37	+0.72
Omega ratio: Gain probability vs. loss probability	1.14	1.05	+0.09
Calmar ratio: Return relative to maximum drawdown	1.20	0.20	+1.01
Martin ratio: Return relative to average drawdown	2.66	0.51	+2.15
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

VPU vs. XLF - Sharpe Ratio Comparison

The current VPU Sharpe Ratio is 0.75, which is higher than the XLF Sharpe Ratio of 0.20. The chart below compares the historical Sharpe Ratios of VPU 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.

Sharpe Ratios by Period

	VPU	XLF	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	0.75	0.20	+0.55
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	0.52	0.46	+0.07
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	0.46	0.58	-0.11
Sharpe Ratio (All Time) Calculated using the full available price history	0.53	0.21	+0.33

Drawdowns

VPU vs. XLF - Drawdown Comparison

The maximum VPU drawdown since its inception was -46.31%, smaller than the maximum XLF drawdown of -82.69%. Use the drawdown chart below to compare losses from any high point for VPU and XLF.

Drawdown Indicators

	VPU	XLF	Difference
Max Drawdown Largest peak-to-trough decline	-46.31%	-82.69%	+36.38%
Max Drawdown (1Y) Largest decline over 1 year	-8.90%	-14.79%	+5.89%
Max Drawdown (3Y) Largest decline over 3 years	-17.34%	-15.54%	-1.80%
Max Drawdown (5Y) Largest decline over 5 years	-25.15%	-25.81%	+0.66%
Max Drawdown (10Y) Largest decline over 10 years	-36.42%	-42.86%	+6.44%
Current Drawdown Current decline from peak	-7.71%	-7.38%	-0.33%
Average Drawdown Average peak-to-trough decline	-7.78%	-20.02%	+12.24%
Ulcer Index Depth and duration of drawdowns from previous peaks	4.02%	5.71%	-1.69%

Volatility

VPU vs. XLF - Volatility Comparison

Vanguard Utilities ETF (VPU) has a higher volatility of 5.56% compared to State Street Financial Select Sector SPDR ETF (XLF) at 4.20%. This indicates that VPU'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

	VPU	XLF	Difference
Volatility (1M) Calculated over the trailing 1-month period	5.56%	4.20%	+1.36%
Volatility (6M) Calculated over the trailing 6-month period	11.53%	11.18%	+0.35%
Volatility (1Y) Calculated over the trailing 1-year period	14.38%	14.61%	-0.23%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	17.07%	18.66%	-1.59%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	19.14%	22.18%	-3.04%

VPU vs. XLF - Expense Ratio Comparison

VPU 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

VPU vs. XLF - Dividend Comparison

VPU's dividend yield for the trailing twelve months is around 2.70%, more than XLF's 1.52% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
VPU Vanguard Utilities ETF	2.70%	2.73%	3.02%	3.49%	2.98%	2.70%	3.17%	2.83%	3.23%	3.18%	3.19%	3.63%
XLF State Street Financial Select Sector SPDR ETF	1.52%	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 VPU and XLF in my portfolio?

VPU and XLF have a correlation of 0.19, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, VPU or XLF?

VPU has higher volatility (5.56%) compared to XLF (4.20%). In terms of maximum drawdown, VPU dropped -46.31% vs XLF's -82.69%.

Which ETF is better, VPU or XLF?

On 10-year performance, XLF leads with 12.79% vs 8.85% for VPU. On fees, XLF is cheaper at 0.08% per year. On volatility, XLF has been the lower-risk option at 4.20%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, VPU or XLF?

Over the 10-year period, XLF has performed better with a 12.79% return vs 8.85%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, VPU or XLF?

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

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

VPU has the higher dividend yield at 2.70%, compared with 1.52% for XLF.

What is the main difference between VPU and XLF?

VPU is categorized as Utilities Equities, while XLF is Financials Equities. VPU tracks MSCI US Investable Market Utilities 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 VPU and 0.08% for XLF.

Which has better risk-adjusted returns?

VPU currently has the higher Sharpe Ratio (0.75 vs 0.20), 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.