XLB vs. XLE

Last updated Jun 17, 2026

XLB (Materials Select Sector SPDR ETF) and XLE (State Street Energy Select Sector SPDR ETF) are both exchange-traded funds - XLB is a Materials fund tracking the Materials Select Sector Index, while XLE is a Energy Equities fund tracking the Energy Select Sector Index. Both are passively managed. Over the past 10 years, XLB returned 10.51%/yr vs 9.45%/yr for XLE. A 0.59 correlation means they provide meaningful diversification when combined. XLB charges 0.13%/yr vs 0.08%/yr for XLE.

Performance

XLB vs. XLE - Performance Comparison

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

Returns By Period

In the year-to-date period, XLB achieves a 16.77% return, which is significantly lower than XLE's 24.63% return. Over the past 10 years, XLB has outperformed XLE with an annualized return of 10.51%, while XLE has yielded a comparatively lower 9.45% annualized return.

XLB

• 1D: 0.42%
• 1M: 4.81%
• YTD: 16.77%
• 6M: 18.28%
• 1Y: 22.00%
• 3Y*: 11.01%
• 5Y*: 7.26%
• 10Y*: 10.51%

XLE

• 1D: -0.34%
• 1M: -6.86%
• YTD: 24.63%
• 6M: 28.27%
• 1Y: 30.09%
• 3Y*: 14.72%
• 5Y*: 19.80%
• 10Y*: 9.45%

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

XLB vs. XLE - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
XLB Materials Select Sector SPDR ETF	16.77%	9.94%	0.15%	12.46%	-12.30%	27.44%	20.46%	24.13%	-14.88%	24.01%
XLE State Street Energy Select Sector SPDR ETF	24.63%	7.88%	5.56%	-0.63%	64.32%	53.28%	-32.67%	11.74%	-18.22%	-0.89%

Correlation

The correlation between XLB and XLE is 0.13, which is low. Their price movements are largely independent, making them effective diversification partners.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.13
Correlation (3Y) Calculated over the trailing 3-year period	0.33
Correlation (5Y) Calculated over the trailing 5-year period	0.44
Correlation (10Y) Calculated over the trailing 10-year period	0.53
Correlation (All Time) Calculated using the full available price history since Dec 22, 1998	0.59

Over the past year, the correlation between XLB and XLE has dropped to 0.13 - well below their long-term average of 0.59, suggesting their price drivers have been diverging.

XLB vs. XLE - Sectors Allocation Comparison

Sectors	XLB	XLE
Basic Materials	87.3%	-
Consumer Cyclical	12.7%	-
Industrials	1.5%	-
Communication Services	-	-
Consumer Defensive	-	-
Energy	-	100.0%
Financial Services	-	-
Healthcare	-	-
Real Estate	-	-
Technology	-	-
Utilities	-	-

Return for Risk

XLB vs. XLE — Risk / Return Rank

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

XLB

XLB Risk / Return Rank: 35
XLB Sharpe Ratio Rank: 36
XLB Sortino Ratio Rank: 36
XLB Omega Ratio Rank: 33
XLB Calmar Ratio Rank: 36
XLB Martin Ratio Rank: 36

XLE

XLE Risk / Return Rank: 42
XLE Sharpe Ratio Rank: 42
XLE Sortino Ratio Rank: 38
XLE Omega Ratio Rank: 37
XLE Calmar Ratio Rank: 52
XLE Martin Ratio Rank: 43

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. XLE - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Materials Select Sector SPDR ETF (XLB) and State Street Energy Select Sector SPDR ETF (XLE). 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	XLE	Difference
Sharpe ratio: Return per unit of total volatility	1.27	1.45	-0.18
Sortino ratio: Return per unit of downside risk	1.86	1.97	-0.11
Omega ratio: Gain probability vs. loss probability	1.22	1.24	-0.02
Calmar ratio: Return relative to maximum drawdown	1.78	2.51	-0.72
Martin ratio: Return relative to average drawdown	5.46	6.80	-1.34

XLB vs. XLE - Sharpe Ratio Comparison

The current XLB Sharpe Ratio is 1.27, which is comparable to the XLE Sharpe Ratio of 1.45. The chart below compares the historical Sharpe Ratios of XLB and XLE, 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. XLE - Drawdown Comparison

The maximum XLB drawdown since its inception was -59.83%, smaller than the maximum XLE drawdown of -71.26%. Use the drawdown chart below to compare losses from any high point for XLB and XLE.

Drawdown Indicators

	XLB	XLE	Difference
Max Drawdown Largest peak-to-trough decline	-59.83%	-71.26%	+11.43%
Max Drawdown (1Y) Largest decline over 1 year	-12.38%	-12.05%	-0.33%
Max Drawdown (3Y) Largest decline over 3 years	-23.17%	-20.14%	-3.03%
Max Drawdown (5Y) Largest decline over 5 years	-24.72%	-26.04%	+1.32%
Max Drawdown (10Y) Largest decline over 10 years	-37.27%	-66.81%	+29.54%
Current Drawdown Current decline from peak	-1.24%	-11.51%	+10.27%
Average Drawdown Average peak-to-trough decline	-10.83%	-17.97%	+7.14%
Ulcer Index Depth and duration of drawdowns from previous peaks	4.04%	4.44%	-0.40%

Volatility

XLB vs. XLE - Volatility Comparison

The current volatility for Materials Select Sector SPDR ETF (XLB) is 6.40%, while State Street Energy Select Sector SPDR ETF (XLE) has a volatility of 7.56%. This indicates that XLB experiences smaller price fluctuations and is considered to be less risky than XLE based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	XLB	XLE	Difference
Volatility (1M) Calculated over the trailing 1-month period	6.40%	7.56%	-1.16%
Volatility (6M) Calculated over the trailing 6-month period	13.47%	17.16%	-3.69%
Volatility (1Y) Calculated over the trailing 1-year period	17.45%	20.82%	-3.37%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	19.05%	26.10%	-7.05%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	20.71%	29.61%	-8.90%

XLB vs. XLE - Expense Ratio Comparison

XLB has a 0.13% expense ratio, which is higher than XLE's 0.08% 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. XLE - Dividend Comparison

XLB's dividend yield for the trailing twelve months is around 1.66%, less than XLE's 2.69% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
XLB Materials Select Sector SPDR ETF	1.66%	1.92%	1.92%	2.00%	2.26%	1.62%	1.72%	1.98%	2.20%	1.66%	1.95%	2.24%
XLE State Street Energy Select Sector SPDR ETF	2.69%	3.28%	3.36%	3.55%	3.68%	4.21%	5.62%	6.72%	3.54%	3.03%	2.26%	3.39%

Frequently Asked Questions

Can I hold both XLB and XLE in my portfolio?

XLB and XLE have a correlation of 0.13, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, XLB or XLE?

XLE has higher volatility (7.56%) compared to XLB (6.40%). In terms of maximum drawdown, XLB dropped -59.83% vs XLE's -71.26%.

Which ETF is better, XLB or XLE?

On 10-year performance, XLB leads with 10.51% vs 9.45% for XLE. On fees, XLE is cheaper at 0.08% per year. On volatility, XLB has been the lower-risk option at 6.40%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, XLB or XLE?

Over the 10-year period, XLB has performed better with a 10.51% return vs 9.45%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, XLB or XLE?

XLE is cheaper with a 0.08% expense ratio, compared with 0.13% for XLB.

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

XLE has the higher dividend yield at 2.69%, compared with 1.66% for XLB.

What is the main difference between XLB and XLE?

XLB is categorized as Materials, while XLE is Energy Equities. XLB tracks Materials Select Sector Index, while XLE tracks Energy Select Sector Index. Their fees differ too: 0.13% for XLB and 0.08% for XLE.

Which has better risk-adjusted returns?

XLE currently has the higher Sharpe Ratio (1.45 vs 1.27), 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.