VWO vs. XLE

Last updated Jun 13, 2026

VWO (Vanguard FTSE Emerging Markets ETF) and XLE (State Street Energy Select Sector SPDR ETF) are both exchange-traded funds - VWO is a Emerging Markets Equities fund tracking the FTSE Emerging Index, while XLE is a Energy Equities fund tracking the Energy Select Sector Index. Both are passively managed. Over the past 10 years, VWO returned 9.00%/yr vs 9.91%/yr for XLE. A 0.56 correlation means they provide meaningful diversification when combined. Both charge a 0.08% expense ratio.

Performance

VWO vs. XLE - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Vanguard FTSE Emerging Markets ETF (VWO) 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, VWO achieves a 10.77% return, which is significantly lower than XLE's 29.56% return. Over the past 10 years, VWO has underperformed XLE with an annualized return of 9.00%, while XLE has yielded a comparatively higher 9.91% annualized return.

VWO

• 1D: 0.76%
• 1M: -0.65%
• YTD: 10.77%
• 6M: 12.57%
• 1Y: 24.61%
• 3Y*: 16.61%
• 5Y*: 5.03%
• 10Y*: 9.00%

XLE

• 1D: 0.75%
• 1M: -0.14%
• YTD: 29.56%
• 6M: 28.37%
• 1Y: 37.19%
• 3Y*: 16.18%
• 5Y*: 20.12%
• 10Y*: 9.91%

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

VWO vs. XLE - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
VWO Vanguard FTSE Emerging Markets ETF	10.77%	25.60%	10.59%	9.25%	-17.98%	1.26%	15.17%	20.75%	-14.76%	31.49%
XLE State Street Energy Select Sector SPDR ETF	29.56%	7.88%	5.56%	-0.63%	64.32%	53.28%	-32.67%	11.74%	-18.22%	-0.89%

Correlation

The correlation between VWO and XLE is -0.08, 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	-0.08
Correlation (3Y) Calculated over the trailing 3-year period	0.16
Correlation (5Y) Calculated over the trailing 5-year period	0.26
Correlation (10Y) Calculated over the trailing 10-year period	0.39
Correlation (All Time) Calculated using the full available price history since Mar 10, 2005	0.56

The correlation between VWO and XLE shifts across timeframes, from -0.08 (1 year) to 0.56 (all time), reflecting how their relationship changes across market environments.

VWO vs. XLE - Sectors Allocation Comparison

Sectors	VWO	XLE
Technology	29.6%	-
Financial Services	19.5%	-
Consumer Cyclical	10.7%	-
Industrials	8.0%	-
Basic Materials	8.0%	-
Communication Services	7.1%	-
Energy	4.6%	100.0%
Healthcare	3.9%	-
Consumer Defensive	3.7%	-
Utilities	2.9%	-
Real Estate	2.2%	-

Return for Risk

VWO vs. XLE — Risk / Return Rank

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

VWO

VWO Risk / Return Rank: 50
VWO Sharpe Ratio Rank: 49
VWO Sortino Ratio Rank: 47
VWO Omega Ratio Rank: 51
VWO Calmar Ratio Rank: 50
VWO Martin Ratio Rank: 52

XLE

XLE Risk / Return Rank: 61
XLE Sharpe Ratio Rank: 64
XLE Sortino Ratio Rank: 58
XLE Omega Ratio Rank: 54
XLE Calmar Ratio Rank: 71
XLE Martin Ratio Rank: 56

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.

VWO vs. XLE - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard FTSE Emerging Markets ETF (VWO) 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.

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.

	VWO	XLE	Difference
Sharpe ratio: Return per unit of total volatility	1.49	1.82	-0.32
Sortino ratio: Return per unit of downside risk	2.10	2.40	-0.30
Omega ratio: Gain probability vs. loss probability	1.28	1.30	-0.01
Calmar ratio: Return relative to maximum drawdown	2.21	3.10	-0.89
Martin ratio: Return relative to average drawdown	7.80	8.63	-0.83

VWO vs. XLE - Sharpe Ratio Comparison

The current VWO Sharpe Ratio is 1.49, which is comparable to the XLE Sharpe Ratio of 1.82. The chart below compares the historical Sharpe Ratios of VWO 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.

Drawdowns

VWO vs. XLE - Drawdown Comparison

The maximum VWO drawdown since its inception was -67.68%, smaller than the maximum XLE drawdown of -71.26%. Use the drawdown chart below to compare losses from any high point for VWO and XLE.

Drawdown Indicators

	VWO	XLE	Difference
Max Drawdown Largest peak-to-trough decline	-67.68%	-71.26%	+3.58%
Max Drawdown (1Y) Largest decline over 1 year	-11.17%	-12.05%	+0.88%
Max Drawdown (3Y) Largest decline over 3 years	-17.37%	-20.14%	+2.77%
Max Drawdown (5Y) Largest decline over 5 years	-32.60%	-26.04%	-6.56%
Max Drawdown (10Y) Largest decline over 10 years	-36.39%	-66.81%	+30.42%
Current Drawdown Current decline from peak	-2.68%	-8.01%	+5.33%
Average Drawdown Average peak-to-trough decline	-15.80%	-17.97%	+2.17%
Ulcer Index Depth and duration of drawdowns from previous peaks	3.17%	4.32%	-1.15%

Volatility

VWO vs. XLE - Volatility Comparison

The current volatility for Vanguard FTSE Emerging Markets ETF (VWO) is 6.64%, while State Street Energy Select Sector SPDR ETF (XLE) has a volatility of 7.26%. This indicates that VWO 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

	VWO	XLE	Difference
Volatility (1M) Calculated over the trailing 1-month period	6.64%	7.26%	-0.62%
Volatility (6M) Calculated over the trailing 6-month period	14.04%	16.79%	-2.75%
Volatility (1Y) Calculated over the trailing 1-year period	16.54%	20.57%	-4.03%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	17.48%	26.05%	-8.57%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	19.22%	29.58%	-10.36%

VWO vs. XLE - Expense Ratio Comparison

Both VWO and XLE have an expense ratio of 0.08%, making them cost-effective options compared to the broader market, where average expense ratios typically range from 0.3% to 0.9%.

Dividends

VWO vs. XLE - Dividend Comparison

VWO's dividend yield for the trailing twelve months is around 2.44%, less than XLE's 2.59% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
VWO Vanguard FTSE Emerging Markets ETF	2.44%	2.79%	3.20%	3.52%	4.11%	2.63%	1.91%	3.23%	2.88%	2.30%	2.52%	3.26%
XLE State Street Energy Select Sector SPDR ETF	2.59%	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 VWO and XLE in my portfolio?

VWO and XLE have a correlation of -0.08, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, VWO or XLE?

XLE has higher volatility (7.26%) compared to VWO (6.64%). In terms of maximum drawdown, VWO dropped -67.68% vs XLE's -71.26%.

Which ETF is better, VWO or XLE?

On 10-year performance, XLE leads with 9.91% vs 9.00% for VWO. Both ETFs have the same 0.08% expense ratio. On volatility, VWO has been the lower-risk option at 6.64%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, VWO or XLE?

Over the 10-year period, XLE has performed better with a 9.91% return vs 9.00%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, VWO or XLE?

VWO and XLE have the same expense ratio: 0.08% per year.

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

XLE has the higher dividend yield at 2.59%, compared with 2.44% for VWO.

What is the main difference between VWO and XLE?

VWO is categorized as Emerging Markets Equities, while XLE is Energy Equities. VWO tracks FTSE Emerging Index, while XLE tracks Energy Select Sector Index. They also come from different issuers: Vanguard and State Street.

Which has better risk-adjusted returns?

XLE currently has the higher Sharpe Ratio (1.82 vs 1.49), 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.