XBI vs. XAR

Last updated Jun 12, 2026

XBI (SPDR S&P Biotech ETF) and XAR (SPDR S&P Aerospace & Defense ETF) are both exchange-traded funds - XBI is a Health & Biotech Equities fund tracking the S&P Biotechnology Select Industry Index, while XAR is a Aerospace & Defense fund tracking the S&P Aerospace & Defense Select Industry Index. Both are passively managed. Over the past 10 years, XBI returned 9.42%/yr vs 18.55%/yr for XAR. At a 0.49 correlation, their price movements are largely independent. Both charge a 0.35% expense ratio.

Performance

XBI vs. XAR - Performance Comparison

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

Returns By Period

In the year-to-date period, XBI achieves a 8.87% return, which is significantly lower than XAR's 17.94% return. Over the past 10 years, XBI has underperformed XAR with an annualized return of 9.42%, while XAR has yielded a comparatively higher 18.55% annualized return.

XBI

• 1D: 3.02%
• 1M: -1.61%
• YTD: 8.87%
• 6M: 8.26%
• 1Y: 57.91%
• 3Y*: 14.63%
• 5Y*: -0.35%
• 10Y*: 9.42%

XAR

• 1D: 6.62%
• 1M: 5.95%
• YTD: 17.94%
• 6M: 18.96%
• 1Y: 43.77%
• 3Y*: 34.21%
• 5Y*: 16.94%
• 10Y*: 18.55%

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

XBI vs. XAR - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
XBI SPDR S&P Biotech ETF	8.87%	35.89%	1.01%	7.60%	-25.87%	-20.45%	48.33%	32.56%	-15.28%	43.77%
XAR SPDR S&P Aerospace & Defense ETF	17.94%	46.15%	23.32%	23.79%	-5.02%	2.31%	6.18%	39.33%	-4.58%	33.00%

Correlation

The correlation between XBI and XAR is 0.47, which is low. Their price movements are largely independent, making them effective diversification partners.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.47
Correlation (3Y) Calculated over the trailing 3-year period	0.50
Correlation (5Y) Calculated over the trailing 5-year period	0.54
Correlation (10Y) Calculated over the trailing 10-year period	0.50
Correlation (All Time) Calculated using the full available price history since Sep 29, 2011	0.49

The correlation between XBI and XAR has been stable across timeframes, ranging from 0.47 to 0.54 - a consistent structural relationship.

XBI vs. XAR - Sectors Allocation Comparison

Sectors	XBI	XAR
Healthcare	99.8%	-
Financial Services	0.2%	-
Basic Materials	0.2%	-
Communication Services	-	-
Consumer Cyclical	-	-
Consumer Defensive	-	-
Energy	-	-
Industrials	-	99.1%
Real Estate	-	-
Technology	-	0.8%
Utilities	-	-

Return for Risk

XBI vs. XAR — Risk / Return Rank

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

XBI

XBI Risk / Return Rank: 85
XBI Sharpe Ratio Rank: 83
XBI Sortino Ratio Rank: 82
XBI Omega Ratio Rank: 74
XBI Calmar Ratio Rank: 94
XBI Martin Ratio Rank: 90

XAR

XAR Risk / Return Rank: 56
XAR Sharpe Ratio Rank: 57
XAR Sortino Ratio Rank: 58
XAR Omega Ratio Rank: 50
XAR Calmar Ratio Rank: 62
XAR Martin Ratio Rank: 51

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.

XBI vs. XAR - Risk-Adjusted Trends Comparison

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

	XBI	XAR	Difference
Sharpe ratio: Return per unit of total volatility	2.23	1.58	+0.65
Sortino ratio: Return per unit of downside risk	3.06	2.29	+0.77
Omega ratio: Gain probability vs. loss probability	1.36	1.26	+0.10
Calmar ratio: Return relative to maximum drawdown	5.99	2.55	+3.43
Martin ratio: Return relative to average drawdown	17.65	7.17	+10.48

XBI vs. XAR - Sharpe Ratio Comparison

The current XBI Sharpe Ratio is 2.23, which is higher than the XAR Sharpe Ratio of 1.58. The chart below compares the historical Sharpe Ratios of XBI and XAR, 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

XBI vs. XAR - Drawdown Comparison

The maximum XBI drawdown since its inception was -63.89%, which is greater than XAR's maximum drawdown of -46.37%. Use the drawdown chart below to compare losses from any high point for XBI and XAR.

Drawdown Indicators

	XBI	XAR	Difference
Max Drawdown Largest peak-to-trough decline	-63.89%	-46.37%	-17.52%
Max Drawdown (1Y) Largest decline over 1 year	-9.72%	-17.22%	+7.50%
Max Drawdown (3Y) Largest decline over 3 years	-32.99%	-19.73%	-13.26%
Max Drawdown (5Y) Largest decline over 5 years	-54.71%	-32.40%	-22.31%
Max Drawdown (10Y) Largest decline over 10 years	-63.89%	-46.37%	-17.52%
Current Drawdown Current decline from peak	-23.28%	-2.81%	-20.47%
Average Drawdown Average peak-to-trough decline	-20.93%	-6.78%	-14.15%
Ulcer Index Depth and duration of drawdowns from previous peaks	3.29%	6.12%	-2.83%

Volatility

XBI vs. XAR - Volatility Comparison

The current volatility for SPDR S&P Biotech ETF (XBI) is 10.38%, while SPDR S&P Aerospace & Defense ETF (XAR) has a volatility of 11.32%. This indicates that XBI experiences smaller price fluctuations and is considered to be less risky than XAR based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	XBI	XAR	Difference
Volatility (1M) Calculated over the trailing 1-month period	10.38%	11.32%	-0.94%
Volatility (6M) Calculated over the trailing 6-month period	20.76%	23.52%	-2.76%
Volatility (1Y) Calculated over the trailing 1-year period	26.12%	27.80%	-1.68%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	32.22%	23.66%	+8.56%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	32.01%	24.74%	+7.27%

XBI vs. XAR - Expense Ratio Comparison

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

Dividends

XBI vs. XAR - Dividend Comparison

XBI's dividend yield for the trailing twelve months is around 0.33%, more than XAR's 0.31% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
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%
XBI SPDR S&P Biotech ETF	0.33%	0.37%	0.15%	0.02%	0.00%	0.04%	0.20%	0.00%	0.28%	0.24%	0.26%	0.61%

Frequently Asked Questions

Can I hold both XBI and XAR in my portfolio?

XBI and XAR have a correlation of 0.47, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, XBI or XAR?

XAR has higher volatility (11.32%) compared to XBI (10.38%). In terms of maximum drawdown, XBI dropped -63.89% vs XAR's -46.37%.

Which ETF is better, XBI or XAR?

On 10-year performance, XAR leads with 18.55% vs 9.42% for XBI. Both ETFs have the same 0.35% expense ratio. On volatility, XBI has been the lower-risk option at 10.38%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, XBI or XAR?

Over the 10-year period, XAR has performed better with a 18.55% return vs 9.42%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, XBI or XAR?

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

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

XBI has the higher dividend yield at 0.33%, compared with 0.31% for XAR.

What is the main difference between XBI and XAR?

XBI is categorized as Health & Biotech Equities, while XAR is Aerospace & Defense. XBI tracks S&P Biotechnology Select Industry Index, while XAR tracks S&P Aerospace & Defense Select Industry Index.

Which has better risk-adjusted returns?

XBI currently has the higher Sharpe Ratio (2.23 vs 1.58), 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.