XAR vs. PHO

Last updated Jun 13, 2026

XAR (SPDR S&P Aerospace & Defense ETF) and PHO (Invesco Water Resources ETF) are both exchange-traded funds - XAR is a Aerospace & Defense fund tracking the S&P Aerospace & Defense Select Industry Index, while PHO is a Water Equities fund tracking the NASDAQ OMX US Water Index. Both are passively managed. Over the past 10 years, XAR returned 18.45%/yr vs 11.71%/yr for PHO. A 0.67 correlation means they provide meaningful diversification when combined. XAR charges 0.35%/yr vs 0.60%/yr for PHO.

Performance

XAR vs. PHO - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in SPDR S&P Aerospace & Defense ETF (XAR) and Invesco Water Resources ETF (PHO). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, XAR achieves a 16.10% return, which is significantly higher than PHO's -4.97% return. Over the past 10 years, XAR has outperformed PHO with an annualized return of 18.45%, while PHO has yielded a comparatively lower 11.71% annualized return.

XAR

• 1D: -1.55%
• 1M: 3.18%
• YTD: 16.10%
• 6M: 18.39%
• 1Y: 42.07%
• 3Y*: 33.32%
• 5Y*: 16.58%
• 10Y*: 18.45%

PHO

• 1D: 0.63%
• 1M: 2.30%
• YTD: -4.97%
• 6M: -6.44%
• 1Y: -1.80%
• 3Y*: 7.13%
• 5Y*: 5.17%
• 10Y*: 11.71%

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

XAR vs. PHO - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
XAR SPDR S&P Aerospace & Defense ETF	16.10%	46.15%	23.32%	23.79%	-5.02%	2.31%	6.18%	39.33%	-4.58%	33.00%
PHO Invesco Water Resources ETF	-4.97%	7.62%	8.59%	18.85%	-14.86%	31.28%	20.83%	37.57%	-6.40%	23.55%

Correlation

The correlation between XAR and PHO is 0.51, which is moderate. They share some common price drivers but move independently often enough to provide real diversification benefit when combined.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.51
Correlation (3Y) Calculated over the trailing 3-year period	0.59
Correlation (5Y) Calculated over the trailing 5-year period	0.64
Correlation (10Y) Calculated over the trailing 10-year period	0.68
Correlation (All Time) Calculated using the full available price history since Sep 29, 2011	0.67

The correlation between XAR and PHO shifts across timeframes, from 0.51 (1 year) to 0.68 (10 years), reflecting how their relationship changes across market environments.

XAR vs. PHO - Sectors Allocation Comparison

Sectors	XAR	PHO
Industrials	99.1%	56.3%
Technology	0.8%	13.1%
Basic Materials	-	8.4%
Communication Services	-	-
Consumer Cyclical	-	-
Consumer Defensive	-	-
Energy	-	-
Financial Services	-	0.0%
Healthcare	-	8.2%
Real Estate	-	-
Utilities	-	14.1%

Return for Risk

XAR vs. PHO — Risk / Return Rank

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

XAR

XAR Risk / Return Rank: 49
XAR Sharpe Ratio Rank: 49
XAR Sortino Ratio Rank: 51
XAR Omega Ratio Rank: 44
XAR Calmar Ratio Rank: 56
XAR Martin Ratio Rank: 48

PHO

PHO Risk / Return Rank: 7
PHO Sharpe Ratio Rank: 7
PHO Sortino Ratio Rank: 7
PHO Omega Ratio Rank: 7
PHO Calmar Ratio Rank: 7
PHO Martin Ratio Rank: 7

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.

XAR vs. PHO - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for SPDR S&P Aerospace & Defense ETF (XAR) and Invesco Water Resources ETF (PHO). 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.

	XAR	PHO	Difference
Sharpe ratio: Return per unit of total volatility	1.50	-0.21	+1.72
Sortino ratio: Return per unit of downside risk	2.20	-0.20	+2.39
Omega ratio: Gain probability vs. loss probability	1.25	0.98	+0.27
Calmar ratio: Return relative to maximum drawdown	2.43	-0.23	+2.66
Martin ratio: Return relative to average drawdown	6.81	-0.58	+7.39

XAR vs. PHO - Sharpe Ratio Comparison

The current XAR Sharpe Ratio is 1.50, which is higher than the PHO Sharpe Ratio of -0.21. The chart below compares the historical Sharpe Ratios of XAR and PHO, 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

XAR vs. PHO - Drawdown Comparison

The maximum XAR drawdown since its inception was -46.37%, smaller than the maximum PHO drawdown of -55.62%. Use the drawdown chart below to compare losses from any high point for XAR and PHO.

Drawdown Indicators

	XAR	PHO	Difference
Max Drawdown Largest peak-to-trough decline	-46.37%	-55.62%	+9.25%
Max Drawdown (1Y) Largest decline over 1 year	-17.22%	-13.78%	-3.44%
Max Drawdown (3Y) Largest decline over 3 years	-19.73%	-19.19%	-0.54%
Max Drawdown (5Y) Largest decline over 5 years	-32.40%	-28.60%	-3.80%
Max Drawdown (10Y) Largest decline over 10 years	-46.37%	-34.92%	-11.45%
Current Drawdown Current decline from peak	-4.32%	-10.21%	+5.89%
Average Drawdown Average peak-to-trough decline	-6.78%	-10.18%	+3.40%
Ulcer Index Depth and duration of drawdowns from previous peaks	6.13%	5.59%	+0.54%

Volatility

XAR vs. PHO - Volatility Comparison

SPDR S&P Aerospace & Defense ETF (XAR) has a higher volatility of 11.46% compared to Invesco Water Resources ETF (PHO) at 4.41%. This indicates that XAR's price experiences larger fluctuations and is considered to be riskier than PHO based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	XAR	PHO	Difference
Volatility (1M) Calculated over the trailing 1-month period	11.46%	4.41%	+7.05%
Volatility (6M) Calculated over the trailing 6-month period	23.56%	11.15%	+12.41%
Volatility (1Y) Calculated over the trailing 1-year period	27.85%	15.12%	+12.73%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	23.66%	18.40%	+5.26%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	24.74%	19.46%	+5.28%

XAR vs. PHO - Expense Ratio Comparison

XAR has a 0.35% expense ratio, which is lower than PHO's 0.60% expense ratio.

Dividends

XAR vs. PHO - Dividend Comparison

XAR's dividend yield for the trailing twelve months is around 0.31%, less than PHO's 0.58% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
PHO Invesco Water Resources ETF	0.58%	0.54%	0.45%	0.59%	0.49%	0.20%	0.39%	0.43%	0.46%	0.34%	0.47%	0.75%
XAR SPDR S&P Aerospace & Defense ETF	0.31%	0.40%	0.66%	0.54%	0.50%	0.83%	0.63%	0.75%	1.19%	0.76%	1.09%	2.31%

Frequently Asked Questions

Can I hold both XAR and PHO in my portfolio?

XAR and PHO have a correlation of 0.51, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, XAR or PHO?

XAR has higher volatility (11.46%) compared to PHO (4.41%). In terms of maximum drawdown, XAR dropped -46.37% vs PHO's -55.62%.

Which ETF is better, XAR or PHO?

On 10-year performance, XAR leads with 18.45% vs 11.71% for PHO. On fees, XAR is cheaper at 0.35% per year. On volatility, PHO has been the lower-risk option at 4.41%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, XAR or PHO?

Over the 10-year period, XAR has performed better with a 18.45% return vs 11.71%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, XAR or PHO?

XAR is cheaper with a 0.35% expense ratio, compared with 0.60% for PHO.

Which ETF pays a higher dividend yield, XAR or PHO?

PHO has the higher dividend yield at 0.58%, compared with 0.31% for XAR.

What is the main difference between XAR and PHO?

XAR is categorized as Aerospace & Defense, while PHO is Water Equities. XAR tracks S&P Aerospace & Defense Select Industry Index, while PHO tracks NASDAQ OMX US Water Index. They also come from different issuers: State Street and Invesco. Their fees differ too: 0.35% for XAR and 0.60% for PHO.

Which has better risk-adjusted returns?

XAR currently has the higher Sharpe Ratio (1.50 vs -0.21), 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.