XLB vs. VAW

Last updated Jun 23, 2026

XLB (Materials Select Sector SPDR ETF) and VAW (Vanguard Materials ETF) are both Materials funds - XLB tracks the Materials Select Sector Index while VAW tracks the MSCI US Investable Market Materials 25/50 Index. Both are passively managed. Over the past 10 years, XLB returned 10.60%/yr vs 10.67%/yr for VAW. With a 0.98 correlation, they move nearly in lockstep. XLB charges 0.13%/yr vs 0.09%/yr for VAW.

Performance

XLB vs. VAW - Performance Comparison

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

Returns By Period

In the year-to-date period, XLB achieves a 14.76% return, which is significantly higher than VAW's 13.13% return. Both investments have delivered pretty close results over the past 10 years, with XLB having a 10.60% annualized return and VAW not far ahead at 10.67%.

XLB

• 1D: 0.01%
• 1M: 3.03%
• YTD: 14.76%
• 6M: 13.96%
• 1Y: 22.26%
• 3Y*: 11.14%
• 5Y*: 6.85%
• 10Y*: 10.60%

VAW

• 1D: -0.13%
• 1M: 2.70%
• YTD: 13.13%
• 6M: 11.82%
• 1Y: 24.61%
• 3Y*: 11.91%
• 5Y*: 7.19%
• 10Y*: 10.67%

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

XLB vs. VAW - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
XLB Materials Select Sector SPDR ETF	14.76%	9.94%	0.15%	12.46%	-12.30%	27.44%	20.46%	24.13%	-14.88%	24.01%
VAW Vanguard Materials ETF	13.13%	12.30%	0.48%	13.67%	-11.80%	27.43%	19.44%	23.53%	-17.49%	23.76%

Correlation

The correlation between XLB and VAW is 0.98 - these two move nearly in lockstep. At this level, holding both provides almost no diversification benefit. If you already own one, adding the other does little to reduce portfolio risk.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.98
Correlation (3Y) Calculated over the trailing 3-year period	0.98
Correlation (5Y) Calculated over the trailing 5-year period	0.99
Correlation (10Y) Calculated over the trailing 10-year period	0.99
Correlation (All Time) Calculated using the full available price history since Jan 30, 2004	0.98

The correlation between XLB and VAW has been stable across timeframes, ranging from 0.98 to 0.99 - a consistent structural relationship.

XLB vs. VAW - Sectors Allocation Comparison

Sectors	XLB	VAW
Basic Materials	87.3%	90.1%
Consumer Cyclical	12.7%	8.3%
Industrials	1.5%	1.1%
Communication Services	-	-
Consumer Defensive	-	0.0%
Energy	-	0.0%
Financial Services	-	-
Healthcare	-	0.5%
Real Estate	-	-
Technology	-	0.1%
Utilities	-	-

Return for Risk

XLB vs. VAW — Risk / Return Rank

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

XLB

XLB Risk / Return Rank: 36
XLB Sharpe Ratio Rank: 37
XLB Sortino Ratio Rank: 37
XLB Omega Ratio Rank: 34
XLB Calmar Ratio Rank: 37
XLB Martin Ratio Rank: 37

VAW

VAW Risk / Return Rank: 38
VAW Sharpe Ratio Rank: 39
VAW Sortino Ratio Rank: 38
VAW Omega Ratio Rank: 35
VAW Calmar Ratio Rank: 38
VAW Martin Ratio Rank: 38

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. VAW - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Materials Select Sector SPDR ETF (XLB) and Vanguard Materials ETF (VAW). 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.

	XLB	VAW	Difference
Sharpe ratio: Return per unit of total volatility	1.28	1.34	-0.06
Sortino ratio: Return per unit of downside risk	1.87	1.93	-0.06
Omega ratio: Gain probability vs. loss probability	1.22	1.23	-0.01
Calmar ratio: Return relative to maximum drawdown	1.81	1.84	-0.04
Martin ratio: Return relative to average drawdown	5.51	5.85	-0.34

XLB vs. VAW - Sharpe Ratio Comparison

The current XLB Sharpe Ratio is 1.28, which is comparable to the VAW Sharpe Ratio of 1.34. The chart below compares the historical Sharpe Ratios of XLB and VAW, 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

XLB vs. VAW - Drawdown Comparison

The maximum XLB drawdown since its inception was -59.83%, roughly equal to the maximum VAW drawdown of -62.17%. Use the drawdown chart below to compare losses from any high point for XLB and VAW.

Drawdown Indicators

	XLB	VAW	Difference
Max Drawdown Largest peak-to-trough decline	-59.83%	-62.17%	+2.34%
Max Drawdown (1Y) Largest decline over 1 year	-12.38%	-13.42%	+1.04%
Max Drawdown (3Y) Largest decline over 3 years	-23.17%	-23.21%	+0.04%
Max Drawdown (5Y) Largest decline over 5 years	-24.72%	-25.50%	+0.78%
Max Drawdown (10Y) Largest decline over 10 years	-37.27%	-41.13%	+3.86%
Current Drawdown Current decline from peak	-2.94%	-3.82%	+0.88%
Average Drawdown Average peak-to-trough decline	-10.82%	-9.62%	-1.20%
Ulcer Index Depth and duration of drawdowns from previous peaks	4.05%	4.22%	-0.17%

Volatility

XLB vs. VAW - Volatility Comparison

The current volatility for Materials Select Sector SPDR ETF (XLB) is 5.94%, while Vanguard Materials ETF (VAW) has a volatility of 6.50%. This indicates that XLB experiences smaller price fluctuations and is considered to be less risky than VAW based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	XLB	VAW	Difference
Volatility (1M) Calculated over the trailing 1-month period	5.94%	6.50%	-0.56%
Volatility (6M) Calculated over the trailing 6-month period	13.55%	14.73%	-1.18%
Volatility (1Y) Calculated over the trailing 1-year period	17.48%	18.44%	-0.96%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	19.01%	19.70%	-0.69%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	20.71%	21.27%	-0.56%

XLB vs. VAW - Expense Ratio Comparison

XLB has a 0.13% expense ratio, which is higher than VAW's 0.09% expense ratio. However, both funds are considered low-cost compared to the broader market, where average expense ratios usually range from 0.3% to 0.9%.

Dividends

XLB vs. VAW - Dividend Comparison

XLB's dividend yield for the trailing twelve months is around 2.07%, more than VAW's 1.36% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
VAW Vanguard Materials ETF	1.36%	1.55%	1.70%	1.72%	1.98%	1.44%	1.67%	1.94%	2.03%	1.63%	1.67%	2.30%
XLB Materials Select Sector SPDR ETF	2.07%	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 VAW in my portfolio?

With a correlation of 0.98, XLB and VAW 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 VAW?

VAW has higher volatility (6.50%) compared to XLB (5.94%). In terms of maximum drawdown, XLB dropped -59.83% vs VAW's -62.17%.

Which ETF is better, XLB or VAW?

On 10-year performance, VAW leads with 10.67% vs 10.60% for XLB. On fees, VAW is cheaper at 0.09% per year. On volatility, XLB has been the lower-risk option at 5.94%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, XLB or VAW?

Over the 10-year period, VAW has performed better with a 10.67% return vs 10.60%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, XLB or VAW?

VAW is cheaper with a 0.09% expense ratio, compared with 0.13% for XLB.

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

XLB has the higher dividend yield at 2.07%, compared with 1.36% for VAW.

What is the main difference between XLB and VAW?

XLB tracks Materials Select Sector Index, while VAW tracks MSCI US Investable Market Materials 25/50 Index. They also come from different issuers: State Street and Vanguard. Their fees differ too: 0.13% for XLB and 0.09% for VAW.

Which has better risk-adjusted returns?

VAW currently has the higher Sharpe Ratio (1.34 vs 1.28), 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.