XHB vs. XLU

Last updated Jun 5, 2026

XHB (SPDR S&P Homebuilders ETF) and XLU (State Street Utilities Select Sector SPDR ETF) are both exchange-traded funds - XHB is a Building & Construction fund tracking the S&P Homebuilders Select Industry Index, while XLU is a Utilities Equities fund tracking the Utilities Select Sector Index. Both are passively managed. Over the past 10 years, XHB returned 12.79%/yr vs 9.22%/yr for XLU. At a 0.36 correlation, their price movements are largely independent. XHB charges 0.35%/yr vs 0.08%/yr for XLU.

Performance

XHB vs. XLU - Performance Comparison

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

Returns By Period

In the year-to-date period, XHB achieves a 1.87% return, which is significantly lower than XLU's 3.65% return. Over the past 10 years, XHB has outperformed XLU with an annualized return of 12.79%, while XLU has yielded a comparatively lower 9.22% annualized return.

XHB

• 1D: 0.80%
• 1M: 1.86%
• YTD: 1.87%
• 6M: -2.42%
• 1Y: 9.74%
• 3Y*: 14.15%
• 5Y*: 8.17%
• 10Y*: 12.79%

XLU

• 1D: 0.53%
• 1M: -5.24%
• YTD: 3.65%
• 6M: 1.99%
• 1Y: 11.64%
• 3Y*: 13.76%
• 5Y*: 9.36%
• 10Y*: 9.22%

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

XHB vs. XLU - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
XHB SPDR S&P Homebuilders ETF	1.87%	-0.69%	9.87%	60.10%	-28.93%	49.70%	27.97%	41.30%	-25.73%	31.80%
XLU State Street Utilities Select Sector SPDR ETF	3.65%	16.03%	23.31%	-7.18%	1.44%	17.70%	0.51%	25.93%	3.94%	12.05%

Correlation

The correlation between XHB and XLU is 0.28, which is low. Their price movements are largely independent, making them effective diversification partners.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.28
Correlation (3Y) Calculated over the trailing 3-year period	0.31
Correlation (5Y) Calculated over the trailing 5-year period	0.35
Correlation (10Y) Calculated over the trailing 10-year period	0.30
Correlation (All Time) Calculated using the full available price history since Feb 7, 2006	0.36

XHB vs. XLU - Sectors Allocation Comparison

Sectors	XHB	XLU
Consumer Cyclical	60.8%	-
Industrials	38.1%	-
Real Estate	1.1%	-
Basic Materials	-	-
Communication Services	-	-
Consumer Defensive	-	-
Energy	-	-
Financial Services	-	-
Healthcare	-	-
Technology	-	-
Utilities	-	100.0%

Return for Risk

XHB vs. XLU — Risk / Return Rank

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

XHB

XHB Risk / Return Rank: 15
XHB Sharpe Ratio Rank: 15
XHB Sortino Ratio Rank: 17
XHB Omega Ratio Rank: 15
XHB Calmar Ratio Rank: 15
XHB Martin Ratio Rank: 14

XLU

XLU Risk / Return Rank: 24
XLU Sharpe Ratio Rank: 24
XLU Sortino Ratio Rank: 23
XLU Omega Ratio Rank: 23
XLU Calmar Ratio Rank: 27
XLU Martin Ratio Rank: 23

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. XLU - Risk-Adjusted Trends Comparison

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

	XHB	XLU	Difference
Sharpe ratio: Return per unit of total volatility	0.35	0.81	-0.45
Sortino ratio: Return per unit of downside risk	0.76	1.18	-0.42
Omega ratio: Gain probability vs. loss probability	1.08	1.15	-0.06
Calmar ratio: Return relative to maximum drawdown	0.45	1.27	-0.82
Martin ratio: Return relative to average drawdown	0.95	2.84	-1.89
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

XHB vs. XLU - Sharpe Ratio Comparison

The current XHB Sharpe Ratio is 0.35, which is lower than the XLU Sharpe Ratio of 0.81. The chart below compares the historical Sharpe Ratios of XHB and XLU, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Sharpe Ratios by Period

	XHB	XLU	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	0.35	0.81	-0.45
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	0.30	0.54	-0.25
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	0.47	0.48	-0.01
Sharpe Ratio (All Time) Calculated using the full available price history	0.16	0.40	-0.23

Drawdowns

XHB vs. XLU - Drawdown Comparison

The maximum XHB drawdown since its inception was -81.61%, which is greater than XLU's maximum drawdown of -51.98%. Use the drawdown chart below to compare losses from any high point for XHB and XLU.

Drawdown Indicators

	XHB	XLU	Difference
Max Drawdown Largest peak-to-trough decline	-81.61%	-51.98%	-29.63%
Max Drawdown (1Y) Largest decline over 1 year	-21.71%	-9.18%	-12.53%
Max Drawdown (3Y) Largest decline over 3 years	-30.53%	-17.26%	-13.27%
Max Drawdown (5Y) Largest decline over 5 years	-39.46%	-25.26%	-14.20%
Max Drawdown (10Y) Largest decline over 10 years	-49.57%	-36.07%	-13.50%
Current Drawdown Current decline from peak	-15.65%	-7.30%	-8.35%
Average Drawdown Average peak-to-trough decline	-27.60%	-10.22%	-17.38%
Ulcer Index Depth and duration of drawdowns from previous peaks	10.32%	4.11%	+6.21%

Volatility

XHB vs. XLU - Volatility Comparison

SPDR S&P Homebuilders ETF (XHB) has a higher volatility of 8.36% compared to State Street Utilities Select Sector SPDR ETF (XLU) at 5.47%. This indicates that XHB's price experiences larger fluctuations and is considered to be riskier than XLU based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	XHB	XLU	Difference
Volatility (1M) Calculated over the trailing 1-month period	8.36%	5.47%	+2.89%
Volatility (6M) Calculated over the trailing 6-month period	20.01%	11.52%	+8.49%
Volatility (1Y) Calculated over the trailing 1-year period	27.71%	14.57%	+13.14%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	27.64%	17.32%	+10.32%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	27.41%	19.25%	+8.16%

XHB vs. XLU - Expense Ratio Comparison

XHB has a 0.35% expense ratio, which is higher than XLU's 0.08% expense ratio.

Dividends

XHB vs. XLU - Dividend Comparison

XHB's dividend yield for the trailing twelve months is around 0.61%, less than XLU's 2.71% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
XHB SPDR S&P Homebuilders ETF	0.61%	0.78%	0.59%	0.77%	1.06%	0.51%	0.73%	0.89%	1.25%	0.72%	0.67%	0.50%
XLU State Street Utilities Select Sector SPDR ETF	2.71%	2.71%	2.96%	3.39%	2.92%	2.79%	3.14%	2.95%	3.33%	3.33%	3.41%	3.67%

Frequently Asked Questions

Can I hold both XHB and XLU in my portfolio?

XHB and XLU have a correlation of 0.28, 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 XLU?

XHB has higher volatility (8.36%) compared to XLU (5.47%). In terms of maximum drawdown, XHB dropped -81.61% vs XLU's -51.98%.

Which ETF is better, XHB or XLU?

On 10-year performance, XHB leads with 12.79% vs 9.22% for XLU. On fees, XLU is cheaper at 0.08% per year. On volatility, XLU has been the lower-risk option at 5.47%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, XHB or XLU?

Over the 10-year period, XHB has performed better with a 12.79% return vs 9.22%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, XHB or XLU?

XLU is cheaper with a 0.08% expense ratio, compared with 0.35% for XHB.

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

XLU has the higher dividend yield at 2.71%, compared with 0.61% for XHB.

What is the main difference between XHB and XLU?

XHB is categorized as Building & Construction, while XLU is Utilities Equities. XHB tracks S&P Homebuilders Select Industry Index, while XLU tracks Utilities Select Sector Index. Their fees differ too: 0.35% for XHB and 0.08% for XLU.

Which has better risk-adjusted returns?

XLU currently has the higher Sharpe Ratio (0.81 vs 0.35), 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.