XLB vs. XLU

Last updated Jun 4, 2026

XLB (Materials Select Sector SPDR ETF) and XLU (State Street Utilities Select Sector SPDR ETF) are both exchange-traded funds - XLB is a Materials fund tracking the Materials Select Sector Index, while XLU is a Utilities Equities fund tracking the Utilities Select Sector Index. Both are passively managed. Over the past 10 years, XLB returned 10.23%/yr vs 9.15%/yr for XLU. At a 0.41 correlation, their price movements are largely independent. XLB charges 0.13%/yr vs 0.08%/yr for XLU.

Performance

XLB vs. XLU - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Materials Select Sector SPDR ETF (XLB) 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, XLB achieves a 14.35% return, which is significantly higher than XLU's 3.11% return. Over the past 10 years, XLB has outperformed XLU with an annualized return of 10.23%, while XLU has yielded a comparatively lower 9.15% 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%

XLU

• 1D: -0.43%
• 1M: -5.74%
• YTD: 3.11%
• 6M: 1.25%
• 1Y: 9.11%
• 3Y*: 13.74%
• 5Y*: 9.25%
• 10Y*: 9.15%

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

XLB vs. XLU - 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%
XLU State Street Utilities Select Sector SPDR ETF	3.11%	16.03%	23.31%	-7.18%	1.44%	17.70%	0.51%	25.93%	3.94%	12.05%

Correlation

The correlation between XLB and XLU is 0.32, which is low. Their price movements are largely independent, making them effective diversification partners.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.32
Correlation (3Y) Calculated over the trailing 3-year period	0.41
Correlation (5Y) Calculated over the trailing 5-year period	0.43
Correlation (10Y) Calculated over the trailing 10-year period	0.35
Correlation (All Time) Calculated using the full available price history since Dec 23, 1998	0.41

The correlation between XLB and XLU shifts across timeframes, from 0.32 (1 year) to 0.43 (5 years), reflecting how their relationship changes across market environments.

XLB vs. XLU - Sectors Allocation Comparison

Sectors	XLB	XLU
Basic Materials	87.6%	-
Consumer Cyclical	12.4%	-
Industrials	1.5%	-
Communication Services	-	-
Consumer Defensive	-	-
Energy	-	-
Financial Services	-	-
Healthcare	-	-
Real Estate	-	-
Technology	-	-
Utilities	-	100.0%

Return for Risk

XLB vs. XLU — 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

XLU

XLU Risk / Return Rank: 19
XLU Sharpe Ratio Rank: 19
XLU Sortino Ratio Rank: 18
XLU Omega Ratio Rank: 18
XLU Calmar Ratio Rank: 22
XLU Martin Ratio Rank: 19

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. XLU - Risk-Adjusted Trends Comparison

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

	XLB	XLU	Difference
Sharpe ratio: Return per unit of total volatility	1.20	0.63	+0.57
Sortino ratio: Return per unit of downside risk	1.76	0.94	+0.82
Omega ratio: Gain probability vs. loss probability	1.21	1.12	+0.09
Calmar ratio: Return relative to maximum drawdown	1.62	1.00	+0.63
Martin ratio: Return relative to average drawdown	5.06	2.24	+2.82
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. XLU - Sharpe Ratio Comparison

The current XLB Sharpe Ratio is 1.20, which is higher than the XLU Sharpe Ratio of 0.63. The chart below compares the historical Sharpe Ratios of XLB 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

	XLB	XLU	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	1.20	0.63	+0.57
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	0.28	0.54	-0.25
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	0.50	0.48	+0.02
Sharpe Ratio (All Time) Calculated using the full available price history	0.36	0.40	-0.04

Drawdowns

XLB vs. XLU - Drawdown Comparison

The maximum XLB drawdown since its inception was -59.83%, which is greater than XLU's maximum drawdown of -51.98%. Use the drawdown chart below to compare losses from any high point for XLB and XLU.

Drawdown Indicators

	XLB	XLU	Difference
Max Drawdown Largest peak-to-trough decline	-59.83%	-51.98%	-7.85%
Max Drawdown (1Y) Largest decline over 1 year	-12.38%	-9.18%	-3.20%
Max Drawdown (3Y) Largest decline over 3 years	-23.17%	-17.26%	-5.91%
Max Drawdown (5Y) Largest decline over 5 years	-24.72%	-25.26%	+0.54%
Max Drawdown (10Y) Largest decline over 10 years	-37.27%	-36.07%	-1.20%
Current Drawdown Current decline from peak	-3.28%	-7.78%	+4.50%
Average Drawdown Average peak-to-trough decline	-10.84%	-10.22%	-0.62%
Ulcer Index Depth and duration of drawdowns from previous peaks	3.96%	4.09%	-0.13%

Volatility

XLB vs. XLU - Volatility Comparison

Materials Select Sector SPDR ETF (XLB) has a higher volatility of 5.73% compared to State Street Utilities Select Sector SPDR ETF (XLU) at 5.41%. This indicates that XLB'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

	XLB	XLU	Difference
Volatility (1M) Calculated over the trailing 1-month period	5.73%	5.41%	+0.32%
Volatility (6M) Calculated over the trailing 6-month period	12.85%	11.53%	+1.32%
Volatility (1Y) Calculated over the trailing 1-year period	16.78%	14.57%	+2.21%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	18.94%	17.32%	+1.62%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	20.65%	19.26%	+1.39%

XLB vs. XLU - Expense Ratio Comparison

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

XLB's dividend yield for the trailing twelve months is around 1.69%, less than XLU's 2.72% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
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%
XLU State Street Utilities Select Sector SPDR ETF	2.72%	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 XLB and XLU in my portfolio?

XLB and XLU have a correlation of 0.32, 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 XLU?

XLB has higher volatility (5.73%) compared to XLU (5.41%). In terms of maximum drawdown, XLB dropped -59.83% vs XLU's -51.98%.

Which ETF is better, XLB or XLU?

On 10-year performance, XLB leads with 10.23% vs 9.15% for XLU. On fees, XLU is cheaper at 0.08% per year. On volatility, XLU has been the lower-risk option at 5.41%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, XLB or XLU?

Over the 10-year period, XLB has performed better with a 10.23% return vs 9.15%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, XLB or XLU?

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

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

XLU has the higher dividend yield at 2.72%, compared with 1.69% for XLB.

What is the main difference between XLB and XLU?

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

Which has better risk-adjusted returns?

XLB currently has the higher Sharpe Ratio (1.20 vs 0.63), 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.