XHB vs. SPY

Last updated Jun 23, 2026

XHB (SPDR S&P Homebuilders ETF) and SPY (State Street SPDR S&P 500 ETF) are both exchange-traded funds - XHB is a Building & Construction fund tracking the S&P Homebuilders Select Industry Index, while SPY is a S&P 500 fund tracking the S&P 500 Index. Both are passively managed. Over the past 10 years, XHB returned 13.79%/yr vs 15.70%/yr for SPY. A 0.72 correlation means they provide meaningful diversification when combined. XHB charges 0.35%/yr vs 0.09%/yr for SPY.

Performance

XHB vs. SPY - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in SPDR S&P Homebuilders ETF (XHB) and State Street SPDR S&P 500 ETF (SPY). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, XHB achieves a 6.31% return, which is significantly lower than SPY's 9.74% return. Over the past 10 years, XHB has underperformed SPY with an annualized return of 13.79%, while SPY has yielded a comparatively higher 15.70% annualized return.

XHB

• 1D: -1.58%
• 1M: 9.28%
• YTD: 6.31%
• 6M: 4.68%
• 1Y: 15.99%
• 3Y*: 13.19%
• 5Y*: 9.70%
• 10Y*: 13.79%

SPY

• 1D: -0.31%
• 1M: 0.09%
• YTD: 9.74%
• 6M: 9.27%
• 1Y: 26.65%
• 3Y*: 21.27%
• 5Y*: 13.51%
• 10Y*: 15.70%

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

XHB vs. SPY - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
XHB SPDR S&P Homebuilders ETF	6.31%	-0.69%	9.87%	60.10%	-28.93%	49.70%	27.97%	41.30%	-25.73%	31.80%
SPY State Street SPDR S&P 500 ETF	9.74%	17.72%	24.89%	26.18%	-18.18%	28.73%	18.33%	31.22%	-4.57%	21.71%

Correlation

The correlation between XHB and SPY 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	0.61
Correlation (5Y) Calculated over the trailing 5-year period	0.70
Correlation (10Y) Calculated over the trailing 10-year period	0.69
Correlation (All Time) Calculated using the full available price history since Feb 6, 2006	0.72

Over the past year, the correlation between XHB and SPY has dropped to 0.51 - well below their long-term average of 0.72, suggesting their price drivers have been diverging.

XHB vs. SPY - Sectors Allocation Comparison

Sectors	XHB	SPY
Consumer Cyclical	60.5%	9.9%
Industrials	38.4%	7.8%
Real Estate	1.1%	1.8%
Basic Materials	-	1.7%
Communication Services	-	10.6%
Consumer Defensive	-	4.5%
Energy	-	3.1%
Financial Services	-	11.1%
Healthcare	-	8.3%
Technology	-	39.0%
Utilities	-	2.1%

Return for Risk

XHB vs. SPY — Risk / Return Rank

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

XHB

XHB Risk / Return Rank: 18
XHB Sharpe Ratio Rank: 17
XHB Sortino Ratio Rank: 20
XHB Omega Ratio Rank: 17
XHB Calmar Ratio Rank: 17
XHB Martin Ratio Rank: 15

SPY

SPY Risk / Return Rank: 68
SPY Sharpe Ratio Rank: 69
SPY Sortino Ratio Rank: 66
SPY Omega Ratio Rank: 68
SPY Calmar Ratio Rank: 63
SPY Martin Ratio Rank: 74

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.

XHB vs. SPY - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for SPDR S&P Homebuilders ETF (XHB) and State Street SPDR S&P 500 ETF (SPY). 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.

	XHB	SPY	Difference
Sharpe ratio: Return per unit of total volatility	0.57	2.16	-1.59
Sortino ratio: Return per unit of downside risk	1.09	2.91	-1.83
Omega ratio: Gain probability vs. loss probability	1.12	1.39	-0.27
Calmar ratio: Return relative to maximum drawdown	0.74	3.01	-2.27
Martin ratio: Return relative to average drawdown	1.51	13.54	-12.02

XHB vs. SPY - Sharpe Ratio Comparison

The current XHB Sharpe Ratio is 0.57, which is lower than the SPY Sharpe Ratio of 2.16. The chart below compares the historical Sharpe Ratios of XHB and SPY, 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

XHB vs. SPY - Drawdown Comparison

The maximum XHB drawdown since its inception was -81.61%, which is greater than SPY's maximum drawdown of -55.19%. Use the drawdown chart below to compare losses from any high point for XHB and SPY.

Drawdown Indicators

	XHB	SPY	Difference
Max Drawdown Largest peak-to-trough decline	-81.61%	-55.19%	-26.42%
Max Drawdown (1Y) Largest decline over 1 year	-21.71%	-8.88%	-12.83%
Max Drawdown (3Y) Largest decline over 3 years	-30.53%	-18.76%	-11.77%
Max Drawdown (5Y) Largest decline over 5 years	-39.46%	-24.50%	-14.96%
Max Drawdown (10Y) Largest decline over 10 years	-49.57%	-33.72%	-15.85%
Current Drawdown Current decline from peak	-11.97%	-1.75%	-10.22%
Average Drawdown Average peak-to-trough decline	-27.57%	-9.04%	-18.53%
Ulcer Index Depth and duration of drawdowns from previous peaks	10.60%	1.97%	+8.63%

Volatility

XHB vs. SPY - Volatility Comparison

SPDR S&P Homebuilders ETF (XHB) has a higher volatility of 8.50% compared to State Street SPDR S&P 500 ETF (SPY) at 4.64%. This indicates that XHB's price experiences larger fluctuations and is considered to be riskier than SPY based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	XHB	SPY	Difference
Volatility (1M) Calculated over the trailing 1-month period	8.50%	4.64%	+3.86%
Volatility (6M) Calculated over the trailing 6-month period	21.06%	9.75%	+11.31%
Volatility (1Y) Calculated over the trailing 1-year period	28.44%	12.43%	+16.01%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	27.84%	17.14%	+10.70%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	27.52%	17.99%	+9.53%

XHB vs. SPY - Expense Ratio Comparison

XHB has a 0.35% expense ratio, which is higher than SPY's 0.09% expense ratio.

Dividends

XHB vs. SPY - Dividend Comparison

XHB's dividend yield for the trailing twelve months is around 0.73%, less than SPY's 1.01% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
SPY State Street SPDR S&P 500 ETF	1.01%	1.07%	1.21%	1.40%	1.65%	1.20%	1.52%	1.75%	2.04%	1.80%	2.03%	2.06%
XHB SPDR S&P Homebuilders ETF	0.73%	0.78%	0.59%	0.77%	1.06%	0.51%	0.73%	0.89%	1.25%	0.72%	0.67%	0.50%

Frequently Asked Questions

Can I hold both XHB and SPY in my portfolio?

XHB and SPY 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, XHB or SPY?

XHB has higher volatility (8.50%) compared to SPY (4.64%). In terms of maximum drawdown, XHB dropped -81.61% vs SPY's -55.19%.

Which ETF is better, XHB or SPY?

On 10-year performance, SPY leads with 15.70% vs 13.79% for XHB. On fees, SPY is cheaper at 0.09% per year. On volatility, SPY has been the lower-risk option at 4.64%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, XHB or SPY?

Over the 10-year period, SPY has performed better with a 15.70% return vs 13.79%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, XHB or SPY?

SPY is cheaper with a 0.09% expense ratio, compared with 0.35% for XHB.

Which ETF pays a higher dividend yield, XHB or SPY?

SPY has the higher dividend yield at 1.01%, compared with 0.73% for XHB.

What is the main difference between XHB and SPY?

XHB is categorized as Building & Construction, while SPY is S&P 500. XHB tracks S&P Homebuilders Select Industry Index, while SPY tracks S&P 500 Index. Their fees differ too: 0.35% for XHB and 0.09% for SPY.

Which has better risk-adjusted returns?

SPY currently has the higher Sharpe Ratio (2.16 vs 0.57), 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.