XAR vs. SMH

Last updated Aug 2, 2026

XAR (SPDR S&P Aerospace & Defense ETF) and SMH (VanEck Semiconductor ETF) are both exchange-traded funds - XAR is a Aerospace & Defense fund tracking the S&P Aerospace & Defense Select Industry Index, while SMH is a Semiconductors fund tracking the MVIS US Listed Semiconductor 25 Index. Both are passively managed. Over the past 10 years, XAR returned 17.38%/yr vs 34.16%/yr for SMH. Their 0.51 correlation means they have sometimes moved together and sometimes differently. Both charge a 0.35% expense ratio.

Performance

XAR vs. SMH - Performance Comparison

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

Returns By Period

In the year-to-date period, XAR achieves a 9.86% return, which is significantly lower than SMH's 50.09% return. Over the past 10 years, XAR has underperformed SMH with an annualized return of 17.38%, while SMH has yielded a comparatively higher 34.16% annualized return.

XAR

• 1D: 0.77%
• 1M: -7.89%
• 6M: -2.90%
• YTD: 9.86%
• 1Y: 24.03%
• 3Y*: 29.11%
• 5Y*: 16.36%
• 10Y*: 17.38%
• ALL TIME*: 18.36%

SMH

• 1D: 0.30%
• 1M: -8.74%
• 6M: 33.97%
• YTD: 50.09%
• 1Y: 90.95%
• 3Y*: 50.56%
• 5Y*: 33.46%
• 10Y*: 34.16%
• ALL TIME*: 11.06%

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

Liquidity Comparison

Position	Avg. Volume Value (2W)	Avg. Volume Value (1M)	Avg. Volume Value (3M)
SMH VanEck Semiconductor ETF	$8.28B	$7.64B	$7.07B
XAR SPDR S&P Aerospace & Defense ETF	$64.82M	$59.56M	$61.10M

XAR vs. SMH - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
XAR SPDR S&P Aerospace & Defense ETF	9.86%	46.15%	23.32%	23.79%	-5.02%	2.31%	6.18%	39.33%	-4.58%	33.00%
SMH VanEck Semiconductor ETF	50.09%	49.17%	39.10%	73.38%	-33.53%	42.13%	55.53%	64.45%	-9.05%	38.48%

Correlation

The correlation between XAR and SMH is 0.49, which is low. Their historical price movements had little consistent relationship.

	Correlation
Correlation (1Y) Focuses on recent behavior, but can change the most.	0.49
Correlation (3Y) Balances recent behavior with more history.	0.45
Correlation (5Y) Shows whether the relationship held over a longer period.	0.52
Correlation (10Y) Provides a long-term view across more market conditions.	0.50
Correlation (All Time) Calculated using the full available price history since Sep 29, 2011	0.51

The correlation between XAR and SMH has been stable across timeframes, ranging from 0.45 to 0.52 - a consistent structural relationship.

XAR vs. SMH - Sectors Allocation Comparison

Sectors	XAR	SMH
Industrials	95.8%	-
Basic Materials	3.1%	-
Technology	1.0%	100.0%
Communication Services	-	-
Consumer Cyclical	-	-
Consumer Defensive	-	-
Energy	-	-
Financial Services	-	-
Healthcare	-	-
Real Estate	-	-
Utilities	-	-

Return for Risk

XAR vs. SMH — Risk / Return Rank

Compare historical risk-adjusted metric ranks over the past 12 months.

XAR

XAR Risk / Return Rank: 34
XAR Sharpe Ratio Rank: 32
XAR Sortino Ratio Rank: 34
XAR Omega Ratio Rank: 31
XAR Calmar Ratio Rank: 38
XAR Martin Ratio Rank: 35

SMH

SMH Risk / Return Rank: 87
SMH Sharpe Ratio Rank: 91
SMH Sortino Ratio Rank: 83
SMH Omega Ratio Rank: 84
SMH Calmar Ratio Rank: 88
SMH Martin Ratio Rank: 91

The rank (0–100) uses a weighted average of the Sharpe, Sortino, Omega, Calmar, and Martin percentile ranks for the trailing 12 months. Higher means stronger historical risk-adjusted performance within the peer group.

XAR vs. SMH - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for SPDR S&P Aerospace & Defense ETF (XAR) and VanEck Semiconductor ETF (SMH). 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	SMH	Difference
Sharpe ratio: Return per unit of total volatility	0.79	2.29	-1.50
Sortino ratio: Return per unit of downside risk	1.29	2.70	-1.40
Omega ratio: Gain probability vs. loss probability	1.15	1.36	-0.21
Calmar ratio: Return relative to maximum drawdown	1.33	3.58	-2.26
Martin ratio: Return relative to average drawdown	3.45	14.64	-11.20

XAR vs. SMH - Sharpe Ratio Comparison

The current XAR Sharpe Ratio is 0.79, which is lower than the SMH Sharpe Ratio of 2.29. The chart below compares the historical Sharpe Ratios of XAR and SMH, 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. SMH - Drawdown Comparison

The maximum XAR drawdown since its inception was -46.37%, smaller than the maximum SMH drawdown of -84.96%. Use the drawdown chart below to compare losses from any high point for XAR and SMH.

Drawdown Indicators

	XAR	SMH	Difference
Max Drawdown Largest peak-to-trough decline	-46.37%	-84.96%	+38.59%
Max Drawdown (1Y) Largest decline over 1 year	-17.22%	-24.62%	+7.40%
Max Drawdown (3Y) Largest decline over 3 years	-19.73%	-35.74%	+16.01%
Max Drawdown (5Y) Largest decline over 5 years	-27.55%	-45.30%	+17.75%
Max Drawdown (10Y) Largest decline over 10 years	-46.37%	-45.30%	-1.07%
Current Drawdown Current decline from peak	-9.47%	-19.19%	+9.72%
Average Drawdown Average peak-to-trough decline	-6.78%	-40.89%	+34.11%
Ulcer Index Depth and duration of drawdowns from previous peaks	6.61%	6.01%	+0.60%

Volatility

XAR vs. SMH - Volatility Comparison

The current volatility for SPDR S&P Aerospace & Defense ETF (XAR) is 8.97%, while VanEck Semiconductor ETF (SMH) has a volatility of 14.70%. This indicates that XAR experiences smaller price fluctuations and is considered to be less risky than SMH based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	XAR	SMH	Difference
Volatility (1M) Calculated over the trailing 1-month period	8.97%	14.70%	-5.73%
Volatility (6M) Calculated over the trailing 6-month period	23.17%	33.13%	-9.96%
Volatility (1Y) Calculated over the trailing 1-year period	28.75%	38.57%	-9.82%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	23.84%	36.50%	-12.66%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	24.85%	33.32%	-8.47%

XAR vs. SMH - Expense Ratio Comparison

Both XAR and SMH have an expense ratio of 0.35%.

Dividends

XAR vs. SMH - Dividend Comparison

XAR's dividend yield for the trailing twelve months is around 0.31%, more than SMH's 0.20% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
SMH VanEck Semiconductor ETF	0.20%	0.31%	0.44%	0.60%	1.18%	0.51%	0.69%	1.50%	1.88%	1.43%	0.80%	2.14%
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 SMH in my portfolio?

XAR and SMH have a correlation of 0.49, 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 SMH?

SMH has higher volatility (14.70%) compared to XAR (8.97%). In terms of maximum drawdown, XAR dropped -46.37% vs SMH's -84.96%.

Which ETF is better, XAR or SMH?

On 10-year performance, SMH leads with 34.16% vs 17.38% for XAR. Both ETFs have the same 0.35% expense ratio. On volatility, XAR has been the lower-risk option at 8.97%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, XAR or SMH?

Over the 10-year period, SMH has performed better with a 34.16% return vs 17.38%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, XAR or SMH?

XAR and SMH have the same expense ratio: 0.35% per year.

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

XAR has the higher dividend yield at 0.31%, compared with 0.20% for SMH.

What is the main difference between XAR and SMH?

XAR is categorized as Aerospace & Defense, while SMH is Semiconductors. XAR tracks S&P Aerospace & Defense Select Industry Index, while SMH tracks MVIS US Listed Semiconductor 25 Index. They also come from different issuers: State Street and VanEck.

Which has better risk-adjusted returns?

SMH currently has the higher Sharpe Ratio (2.29 vs 0.79), 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.