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XLE vs. EEM
Performance
Return for Risk
Drawdowns
Volatility
Dividends

XLE vs. EEM

Last updated Jun 14, 2026

XLE (State Street Energy Select Sector SPDR ETF) and EEM (iShares MSCI Emerging Markets ETF) are both exchange-traded funds - XLE is a Energy Equities fund tracking the Energy Select Sector Index, while EEM is a Emerging Markets Diversified fund tracking the MSCI Emerging Markets Index (Net). Both are passively managed. Over the past 10 years, XLE returned 9.91%/yr vs 9.91%/yr for EEM. A 0.54 correlation means they provide meaningful diversification when combined. XLE charges 0.08%/yr vs 0.72%/yr for EEM.

Performance

XLE vs. EEM - Performance Comparison

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

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Returns By Period

In the year-to-date period, XLE achieves a 29.56% return, which is significantly higher than EEM's 24.07% return. Over a longer period, both investments have demonstrated similar performance, with their 10-year annualized returns being quite close: XLE at 9.91% and EEM at 9.91%.

XLE

1D
0.75%
1M
-0.90%
YTD
29.56%
6M
28.37%
1Y
34.84%
3Y*
16.18%
5Y*
20.12%
10Y*
9.91%

EEM

1D
0.56%
1M
0.74%
YTD
24.07%
6M
26.94%
1Y
47.57%
3Y*
21.60%
5Y*
6.56%
10Y*
9.91%
*Multi-year figures are annualized to reflect compound growth (CAGR)

XLE vs. EEM - Yearly Performance Comparison

2026 (YTD)202520242023202220212020201920182017
XLE
State Street Energy Select Sector SPDR ETF		29.56%7.88%5.56%-0.63%64.32%53.28%-32.67%11.74%-18.22%-0.89%
EEM
iShares MSCI Emerging Markets ETF		24.07%33.98%6.49%8.95%-20.56%-3.63%17.02%18.22%-15.31%37.26%

Correlation

The correlation between XLE and EEM is -0.05, meaning there is essentially no relationship between their price movements. Each responds to its own set of market drivers, making them strong candidates for combining in a diversified portfolio.

Correlation
Correlation (1Y)
Calculated over the trailing 1-year period

-0.05

Correlation (3Y)
Calculated over the trailing 3-year period

0.16

Correlation (5Y)
Calculated over the trailing 5-year period

0.26

Correlation (10Y)
Calculated over the trailing 10-year period

0.39

Correlation (All Time)
Calculated using the full available price history since Apr 14, 2003

0.54

The correlation between XLE and EEM shifts across timeframes, from -0.05 (1 year) to 0.54 (all time), reflecting how their relationship changes across market environments.

XLE vs. EEM - Sectors Allocation Comparison

Sectors
XLE
EEM

Energy

100.0%
3.4%

Basic Materials

-

5.9%

Communication Services

-

6.0%

Consumer Cyclical

-

8.3%

Consumer Defensive

-

2.5%

Financial Services

-

17.7%

Healthcare

-

2.5%

Industrials

-

6.6%

Real Estate

-

1.0%

Technology

-

44.3%

Utilities

-

1.8%

Energy

XLE
100.0%
EEM
3.4%

Basic Materials

XLE

-

EEM
5.9%

Communication Services

XLE

-

EEM
6.0%

Consumer Cyclical

XLE

-

EEM
8.3%

Consumer Defensive

XLE

-

EEM
2.5%

Financial Services

XLE

-

EEM
17.7%

Healthcare

XLE

-

EEM
2.5%

Industrials

XLE

-

EEM
6.6%

Real Estate

XLE

-

EEM
1.0%

Technology

XLE

-

EEM
44.3%

Utilities

XLE

-

EEM
1.8%

Compare stocks, funds, or ETFs

Search for stocks, ETFs, and funds for a quick comparison or use the comparison tool for more options.

State Street Energy Select Sector SPDR ETF

iShares MSCI Emerging Markets ETF

Often compared with XLE:
XLE vs. VDEXLE vs. USOXLE vs. XOPXLE vs. XLUXLE vs. XLKXLE vs. IXCXLE vs. FENY
Often compared with EEM:
EEM vs. VWOEEM vs. SPYEEM vs. IEMGEEM vs. IS3N.DEEEM vs. VXUSEEM vs. EEMSEEM vs. SPEM

Return for Risk

XLE vs. EEM — Risk / Return Rank

Compare risk-adjusted metric ranks to identify better-performing investments over the past 12 months.
XLE
XLE Risk / Return Rank: 6161
Overall Rank
XLE Sharpe Ratio Rank: 6464
Sharpe Ratio Rank
XLE Sortino Ratio Rank: 5858
Sortino Ratio Rank
XLE Omega Ratio Rank: 5454
Omega Ratio Rank
XLE Calmar Ratio Rank: 7171
Calmar Ratio Rank
XLE Martin Ratio Rank: 5656
Martin Ratio Rank
EEM
EEM Risk / Return Rank: 7575
Overall Rank
EEM Sharpe Ratio Rank: 7676
Sharpe Ratio Rank
EEM Sortino Ratio Rank: 7070
Sortino Ratio Rank
EEM Omega Ratio Rank: 7878
Omega Ratio Rank
EEM Calmar Ratio Rank: 7575
Calmar Ratio Rank
EEM Martin Ratio Rank: 7575
Martin Ratio Rank
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.

XLE vs. EEM - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for State Street Energy Select Sector SPDR ETF (XLE) and iShares MSCI Emerging Markets ETF (EEM). 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.

XLEEEMDifference
Sharpe ratioReturn per unit of total volatility
1.82
2.10

-0.28

Sortino ratioReturn per unit of downside risk
2.40
2.73

-0.33

Omega ratioGain probability vs. loss probability

1.30

1.40

-0.10

Calmar ratioReturn relative to maximum drawdown

3.10

3.36

-0.26

Martin ratioReturn relative to average drawdown

8.63

12.38

-3.75

XLE vs. EEM - Sharpe Ratio Comparison

The current XLE Sharpe Ratio is 1.82, which is comparable to the EEM Sharpe Ratio of 2.10. The chart below compares the historical Sharpe Ratios of XLE and EEM, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

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Drawdowns

XLE vs. EEM - Drawdown Comparison

The maximum XLE drawdown since its inception was -71.26%, which is greater than EEM's maximum drawdown of -66.43%. Use the drawdown chart below to compare losses from any high point for XLE and EEM.

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Drawdown Indicators

XLEEEMDifference

Max Drawdown

Largest peak-to-trough decline

-71.26%

-66.43%

-4.83%

Max Drawdown (1Y)

Largest decline over 1 year

-12.05%

-13.52%

+1.47%

Max Drawdown (3Y)

Largest decline over 3 years

-20.14%

-17.29%

-2.85%

Max Drawdown (5Y)

Largest decline over 5 years

-26.04%

-37.49%

+11.45%

Max Drawdown (10Y)

Largest decline over 10 years

-66.81%

-39.82%

-26.99%

Current Drawdown

Current decline from peak

-8.01%

-4.12%

-3.89%

Average Drawdown

Average peak-to-trough decline

-17.97%

-16.00%

-1.97%

Ulcer Index

Depth and duration of drawdowns from previous peaks

4.32%

3.67%

+0.65%

Volatility

XLE vs. EEM - Volatility Comparison

The current volatility for State Street Energy Select Sector SPDR ETF (XLE) is 7.26%, while iShares MSCI Emerging Markets ETF (EEM) has a volatility of 10.80%. This indicates that XLE experiences smaller price fluctuations and is considered to be less risky than EEM based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

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Volatility by Period

XLEEEMDifference

Volatility (1M)

Calculated over the trailing 1-month period

7.26%

10.80%

-3.54%

Volatility (6M)

Calculated over the trailing 6-month period

16.79%

19.39%

-2.60%

Volatility (1Y)

Calculated over the trailing 1-year period

20.57%

21.64%

-1.07%

Volatility (5Y)

Calculated over the trailing 5-year period, annualized

26.05%

19.26%

+6.79%

Volatility (10Y)

Calculated over the trailing 10-year period, annualized

29.58%

20.64%

+8.94%

XLE vs. EEM - Expense Ratio Comparison

XLE has a 0.08% expense ratio, which is lower than EEM's 0.72% expense ratio.

Dividends

XLE vs. EEM - Dividend Comparison

XLE's dividend yield for the trailing twelve months is around 2.59%, more than EEM's 1.79% yield.

PositionTTM20252024202320222021202020192018201720162015
EEM
iShares MSCI Emerging Markets ETF		1.79%2.22%2.43%2.63%2.50%1.99%1.45%2.76%2.24%1.89%1.89%2.49%
XLE
State Street Energy Select Sector SPDR ETF		2.59%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

XLE and EEM have a correlation of -0.05, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

EEM has higher volatility (10.80%) compared to XLE (7.26%). In terms of maximum drawdown, XLE dropped -71.26% vs EEM's -66.43%.

On 10-year performance, EEM leads with 9.91% vs 9.91% for XLE. On fees, XLE is cheaper at 0.08% per year. On volatility, XLE has been the lower-risk option at 7.26%. The better choice depends on whether you care most about return, fees, risk, or income.

Over the 10-year period, EEM has performed better with a 9.91% return vs 9.91%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

XLE is cheaper with a 0.08% expense ratio, compared with 0.72% for EEM.

XLE has the higher dividend yield at 2.59%, compared with 1.79% for EEM.

XLE is categorized as Energy Equities, while EEM is Emerging Markets Diversified. XLE tracks Energy Select Sector Index, while EEM tracks MSCI Emerging Markets Index (Net). They also come from different issuers: State Street and iShares. Their fees differ too: 0.08% for XLE and 0.72% for EEM.

EEM currently has the higher Sharpe Ratio (2.10 vs 1.82), 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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