XLB vs. FXZ

Last updated Jun 4, 2026

XLB (Materials Select Sector SPDR ETF) and FXZ (First Trust Materials AlphaDEX Fund) are both Materials funds - XLB tracks the Materials Select Sector Index while FXZ tracks the StrataQuant Materials Index. Both are passively managed. Over the past 10 years, XLB returned 10.23%/yr vs 11.67%/yr for FXZ. Their correlation of 0.89 suggests significant overlap in exposure. XLB charges 0.13%/yr vs 0.67%/yr for FXZ.

Performance

XLB vs. FXZ - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Materials Select Sector SPDR ETF (XLB) and First Trust Materials AlphaDEX Fund (FXZ). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, XLB achieves a 14.35% return, which is significantly lower than FXZ's 29.62% return. Over the past 10 years, XLB has underperformed FXZ with an annualized return of 10.23%, while FXZ has yielded a comparatively higher 11.67% annualized return.

XLB

• 1D: 0.21%
• 1M: 1.93%
• YTD: 14.35%
• 6M: 17.15%
• 1Y: 19.99%
• 3Y*: 11.71%
• 5Y*: 5.35%
• 10Y*: 10.23%

FXZ

• 1D: -0.40%
• 1M: 5.70%
• YTD: 29.62%
• 6M: 33.34%
• 1Y: 53.31%
• 3Y*: 13.07%
• 5Y*: 7.84%
• 10Y*: 11.67%

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

XLB vs. FXZ - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
XLB Materials Select Sector SPDR ETF	14.35%	9.94%	0.15%	12.46%	-12.30%	27.44%	20.46%	24.13%	-14.88%	24.01%
FXZ First Trust Materials AlphaDEX Fund	29.62%	16.25%	-16.31%	16.27%	-0.92%	30.84%	22.52%	21.52%	-22.62%	23.72%

Correlation

The correlation between XLB and FXZ is 0.92, indicating a strong positive relationship between their price movements. Combining them offers limited diversification - they tend to fall together during downturns.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.92
Correlation (3Y) Calculated over the trailing 3-year period	0.90
Correlation (5Y) Calculated over the trailing 5-year period	0.91
Correlation (10Y) Calculated over the trailing 10-year period	0.91
Correlation (All Time) Calculated using the full available price history since May 11, 2007	0.89

The correlation between XLB and FXZ has been stable across timeframes, ranging from 0.89 to 0.92 - a consistent structural relationship.

XLB vs. FXZ - Sectors Allocation Comparison

Sectors	XLB	FXZ
Basic Materials	87.6%	75.7%
Consumer Cyclical	12.4%	3.9%
Industrials	1.5%	20.4%
Communication Services	-	-
Consumer Defensive	-	-
Energy	-	-
Financial Services	-	-
Healthcare	-	-
Real Estate	-	-
Technology	-	-
Utilities	-	-

Return for Risk

XLB vs. FXZ — Risk / Return Rank

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

XLB

XLB Risk / Return Rank: 32
XLB Sharpe Ratio Rank: 32
XLB Sortino Ratio Rank: 32
XLB Omega Ratio Rank: 30
XLB Calmar Ratio Rank: 32
XLB Martin Ratio Rank: 33

FXZ

FXZ Risk / Return Rank: 74
FXZ Sharpe Ratio Rank: 75
FXZ Sortino Ratio Rank: 70
FXZ Omega Ratio Rank: 66
FXZ Calmar Ratio Rank: 81
FXZ Martin Ratio Rank: 80

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.

XLB vs. FXZ - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Materials Select Sector SPDR ETF (XLB) and First Trust Materials AlphaDEX Fund (FXZ). 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.

	XLB	FXZ	Difference
Sharpe ratio: Return per unit of total volatility	1.20	2.45	-1.25
Sortino ratio: Return per unit of downside risk	1.76	3.21	-1.46
Omega ratio: Gain probability vs. loss probability	1.21	1.40	-0.20
Calmar ratio: Return relative to maximum drawdown	1.62	4.20	-2.58
Martin ratio: Return relative to average drawdown	5.06	15.80	-10.74
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

XLB vs. FXZ - Sharpe Ratio Comparison

The current XLB Sharpe Ratio is 1.20, which is lower than the FXZ Sharpe Ratio of 2.45. The chart below compares the historical Sharpe Ratios of XLB and FXZ, 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

	XLB	FXZ	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	1.20	2.45	-1.25
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	0.28	0.33	-0.04
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	0.50	0.47	+0.03
Sharpe Ratio (All Time) Calculated using the full available price history	0.36	0.35	+0.01

Drawdowns

XLB vs. FXZ - Drawdown Comparison

The maximum XLB drawdown since its inception was -59.83%, smaller than the maximum FXZ drawdown of -65.46%. Use the drawdown chart below to compare losses from any high point for XLB and FXZ.

Drawdown Indicators

	XLB	FXZ	Difference
Max Drawdown Largest peak-to-trough decline	-59.83%	-65.46%	+5.63%
Max Drawdown (1Y) Largest decline over 1 year	-12.38%	-12.75%	+0.37%
Max Drawdown (3Y) Largest decline over 3 years	-23.17%	-33.99%	+10.82%
Max Drawdown (5Y) Largest decline over 5 years	-24.72%	-33.99%	+9.27%
Max Drawdown (10Y) Largest decline over 10 years	-37.27%	-49.41%	+12.14%
Current Drawdown Current decline from peak	-3.28%	-0.40%	-2.88%
Average Drawdown Average peak-to-trough decline	-10.84%	-11.36%	+0.52%
Ulcer Index Depth and duration of drawdowns from previous peaks	3.96%	3.38%	+0.58%

Volatility

XLB vs. FXZ - Volatility Comparison

The current volatility for Materials Select Sector SPDR ETF (XLB) is 5.73%, while First Trust Materials AlphaDEX Fund (FXZ) has a volatility of 7.04%. This indicates that XLB experiences smaller price fluctuations and is considered to be less risky than FXZ based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	XLB	FXZ	Difference
Volatility (1M) Calculated over the trailing 1-month period	5.73%	7.04%	-1.31%
Volatility (6M) Calculated over the trailing 6-month period	12.85%	16.40%	-3.55%
Volatility (1Y) Calculated over the trailing 1-year period	16.78%	21.87%	-5.09%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	18.94%	24.13%	-5.19%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	20.65%	24.87%	-4.22%

XLB vs. FXZ - Expense Ratio Comparison

XLB has a 0.13% expense ratio, which is lower than FXZ's 0.67% expense ratio.

Dividends

XLB vs. FXZ - Dividend Comparison

XLB's dividend yield for the trailing twelve months is around 1.69%, more than FXZ's 1.38% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
FXZ First Trust Materials AlphaDEX Fund	1.38%	1.74%	1.81%	1.97%	1.56%	1.11%	1.51%	1.58%	1.38%	1.01%	1.19%	1.26%
XLB Materials Select Sector SPDR ETF	1.69%	1.92%	1.92%	2.00%	2.26%	1.62%	1.72%	1.98%	2.20%	1.66%	1.95%	2.24%

Frequently Asked Questions

Can I hold both XLB and FXZ in my portfolio?

With a correlation of 0.92, XLB and FXZ move almost identically. Holding both adds very little diversification - you're essentially doubling your position in the same market segment. Choosing one is usually more capital-efficient.

Which is riskier, XLB or FXZ?

FXZ has higher volatility (7.04%) compared to XLB (5.73%). In terms of maximum drawdown, XLB dropped -59.83% vs FXZ's -65.46%.

Which ETF is better, XLB or FXZ?

On 10-year performance, FXZ leads with 11.67% vs 10.23% for XLB. On fees, XLB is cheaper at 0.13% per year. On volatility, XLB has been the lower-risk option at 5.73%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, XLB or FXZ?

Over the 10-year period, FXZ has performed better with a 11.67% return vs 10.23%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, XLB or FXZ?

XLB is cheaper with a 0.13% expense ratio, compared with 0.67% for FXZ.

Which ETF pays a higher dividend yield, XLB or FXZ?

XLB has the higher dividend yield at 1.69%, compared with 1.38% for FXZ.

What is the main difference between XLB and FXZ?

XLB tracks Materials Select Sector Index, while FXZ tracks StrataQuant Materials Index. They also come from different issuers: State Street and First Trust. Their fees differ too: 0.13% for XLB and 0.67% for FXZ.

Which has better risk-adjusted returns?

FXZ currently has the higher Sharpe Ratio (2.45 vs 1.20), 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.