XLC vs. VNQ
XLC (Communication Services Select Sector SPDR Fund) and VNQ (Vanguard Real Estate ETF) are both exchange-traded funds - XLC is a Communications Equities fund tracking the S&P Communication Services Select Sector Index, while VNQ is a REIT fund tracking the MSCI US Investable Market Real Estate 25/50 Index. Both are passively managed. Over the past 5 years, XLC returned 8.03%/yr vs 2.55%/yr for VNQ. At a 0.49 correlation, their price movements are largely independent. Both charge a 0.13% expense ratio.
Performance
XLC vs. VNQ - Performance Comparison
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Returns By Period
In the year-to-date period, XLC achieves a -4.85% return, which is significantly lower than VNQ's 12.51% return.
XLC
- 1D
- -0.42%
- 1M
- -4.66%
- YTD
- -4.85%
- 6M
- -3.59%
- 1Y
- 10.19%
- 3Y*
- 21.60%
- 5Y*
- 8.03%
- 10Y*
- —
VNQ
- 1D
- 0.92%
- 1M
- 3.35%
- YTD
- 12.51%
- 6M
- 12.32%
- 1Y
- 14.02%
- 3Y*
- 10.14%
- 5Y*
- 2.55%
- 10Y*
- 5.65%
XLC vs. VNQ - Yearly Performance Comparison
| 2026 (YTD) | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | |
|---|---|---|---|---|---|---|---|---|---|
XLC Communication Services Select Sector SPDR Fund | -4.85% | 23.08% | 34.71% | 52.82% | -37.63% | 15.96% | 26.90% | 31.05% | -16.45% |
VNQ Vanguard Real Estate ETF | 12.51% | 3.24% | 4.81% | 11.85% | -26.25% | 40.54% | -4.61% | 28.91% | -3.12% |
Correlation
The correlation between XLC and VNQ is 0.39, which is low. Their price movements are largely independent, making them effective diversification partners.
| Correlation | |
|---|---|
Correlation (1Y) Calculated over the trailing 1-year period | 0.39 |
Correlation (3Y) Calculated over the trailing 3-year period | 0.40 |
Correlation (5Y) Calculated over the trailing 5-year period | 0.50 |
Correlation (All Time) Calculated using the full available price history since Jun 19, 2018 | 0.49 |
The correlation between XLC and VNQ shifts across timeframes, from 0.39 (1 year) to 0.50 (5 years), reflecting how their relationship changes across market environments.
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Return for Risk
XLC vs. VNQ — Risk / Return Rank
XLC
VNQ
XLC vs. VNQ - Risk-Adjusted Trends Comparison
This table presents a comparison of risk-adjusted performance metrics for Communication Services Select Sector SPDR Fund (XLC) and Vanguard Real Estate ETF (VNQ). 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.
| XLC | VNQ | Difference | |
|---|---|---|---|
| Sharpe ratioReturn per unit of total volatility | -0.27 | ||
| Sortino ratioReturn per unit of downside risk | -0.31 | ||
| Omega ratioGain probability vs. loss probability | 1.12 | 1.17 | -0.05 |
| Calmar ratioReturn relative to maximum drawdown | 0.86 | 1.56 | -0.69 |
| Martin ratioReturn relative to average drawdown | 2.73 | 4.90 | -2.17 |
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Drawdowns
XLC vs. VNQ - Drawdown Comparison
The maximum XLC drawdown since its inception was -46.65%, smaller than the maximum VNQ drawdown of -73.07%. Use the drawdown chart below to compare losses from any high point for XLC and VNQ.
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Drawdown Indicators
| XLC | VNQ | Difference | |
|---|---|---|---|
Max DrawdownLargest peak-to-trough decline | -46.65% | -73.07% | +26.42% |
Max Drawdown (1Y)Largest decline over 1 year | -10.57% | -8.34% | -2.23% |
Max Drawdown (3Y)Largest decline over 3 years | -17.97% | -17.46% | -0.51% |
Max Drawdown (5Y)Largest decline over 5 years | -46.65% | -34.48% | -12.17% |
Max Drawdown (10Y)Largest decline over 10 years | — | -42.40% | — |
Current DrawdownCurrent decline from peak | -6.72% | 0.00% | -6.72% |
Average DrawdownAverage peak-to-trough decline | -10.58% | -13.61% | +3.03% |
Ulcer IndexDepth and duration of drawdowns from previous peaks | 3.33% | 2.65% | +0.68% |
Volatility
XLC vs. VNQ - Volatility Comparison
The current volatility for Communication Services Select Sector SPDR Fund (XLC) is 3.57%, while Vanguard Real Estate ETF (VNQ) has a volatility of 4.72%. This indicates that XLC experiences smaller price fluctuations and is considered to be less risky than VNQ based on this measure. The chart below showcases a comparison of their rolling one-month volatility.
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Volatility by Period
| XLC | VNQ | Difference | |
|---|---|---|---|
Volatility (1M)Calculated over the trailing 1-month period | 3.57% | 4.72% | -1.15% |
Volatility (6M)Calculated over the trailing 6-month period | 9.65% | 9.77% | -0.12% |
Volatility (1Y)Calculated over the trailing 1-year period | 13.28% | 13.54% | -0.26% |
Volatility (5Y)Calculated over the trailing 5-year period, annualized | 20.68% | 18.84% | +1.84% |
Volatility (10Y)Calculated over the trailing 10-year period, annualized | 22.17% | 20.72% | +1.45% |
XLC vs. VNQ - Expense Ratio Comparison
Both XLC and VNQ have an expense ratio of 0.13%, making them cost-effective options compared to the broader market, where average expense ratios typically range from 0.3% to 0.9%.
Dividends
XLC vs. VNQ - Dividend Comparison
XLC's dividend yield for the trailing twelve months is around 1.25%, less than VNQ's 3.54% yield.
| Position | TTM | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
VNQ Vanguard Real Estate ETF | 3.54% | 3.92% | 3.85% | 3.95% | 3.91% | 2.56% | 3.93% | 3.39% | 4.74% | 4.23% | 4.82% | 3.92% |
XLC Communication Services Select Sector SPDR Fund | 1.25% | 1.13% | 0.99% | 0.82% | 1.10% | 0.74% | 0.68% | 0.82% | 0.64% | 0.00% | 0.00% | 0.00% |
Frequently Asked Questions
XLC and VNQ have a correlation of 0.39, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.
VNQ has higher volatility (4.72%) compared to XLC (3.57%). In terms of maximum drawdown, XLC dropped -46.65% vs VNQ's -73.07%.
On 5-year performance, XLC leads with 8.03% vs 2.55% for VNQ. Both ETFs have the same 0.13% expense ratio. On volatility, XLC has been the lower-risk option at 3.57%. The better choice depends on whether you care most about return, fees, risk, or income.
Over the 5-year period, XLC has performed better with a 8.03% return vs 2.55%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.
XLC and VNQ have the same expense ratio: 0.13% per year.
VNQ has the higher dividend yield at 3.54%, compared with 1.25% for XLC.
XLC is categorized as Communications Equities, while VNQ is REIT. XLC tracks S&P Communication Services Select Sector Index, while VNQ tracks MSCI US Investable Market Real Estate 25/50 Index. They also come from different issuers: State Street and Vanguard.
VNQ currently has the higher Sharpe Ratio (0.96 vs 0.69), 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.
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