XLE vs. VDE

Last updated Jun 7, 2026

XLE (State Street Energy Select Sector SPDR ETF) and VDE (Vanguard Energy ETF) are both Energy Equities funds - XLE tracks the Energy Select Sector Index while VDE tracks the MSCI US Investable Market Energy 25/50 Index. Both are passively managed. Over the past 10 years, XLE returned 9.54%/yr vs 8.99%/yr for VDE. With a 0.99 correlation, they move nearly in lockstep. XLE charges 0.08%/yr vs 0.09%/yr for VDE.

Performance

XLE vs. VDE - Performance Comparison

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

Returns By Period

The year-to-date returns for both stocks are quite close, with XLE having a 29.83% return and VDE slightly lower at 29.68%. Over the past 10 years, XLE has outperformed VDE with an annualized return of 9.54%, while VDE has yielded a comparatively lower 8.99% annualized return.

XLE

• 1D: -1.84%
• 1M: 3.54%
• YTD: 29.83%
• 6M: 27.49%
• 1Y: 42.72%
• 3Y*: 16.70%
• 5Y*: 20.01%
• 10Y*: 9.54%

VDE

• 1D: -2.11%
• 1M: 2.51%
• YTD: 29.68%
• 6M: 26.87%
• 1Y: 42.81%
• 3Y*: 17.17%
• 5Y*: 19.96%
• 10Y*: 8.99%

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

XLE vs. VDE - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
XLE State Street Energy Select Sector SPDR ETF	29.83%	7.88%	5.56%	-0.63%	64.32%	53.28%	-32.67%	11.74%	-18.22%	-0.89%
VDE Vanguard Energy ETF	29.68%	7.11%	6.75%	0.03%	62.89%	56.31%	-33.02%	9.28%	-19.95%	-2.50%

Correlation

The correlation between XLE and VDE is 0.99 - 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	0.99
Correlation (3Y) Calculated over the trailing 3-year period	0.99
Correlation (5Y) Calculated over the trailing 5-year period	1.00
Correlation (10Y) Calculated over the trailing 10-year period	1.00
Correlation (All Time) Calculated using the full available price history since Sep 30, 2004	0.99

The correlation between XLE and VDE has been stable across timeframes, ranging from 0.99 to 1.00 - a consistent structural relationship.

XLE vs. VDE - Sectors Allocation Comparison

Sectors	XLE	VDE
Energy	100.0%	99.5%
Basic Materials	-	0.4%
Communication Services	-	-
Consumer Cyclical	-	-
Consumer Defensive	-	-
Financial Services	-	-
Healthcare	-	-
Industrials	-	0.1%
Real Estate	-	-
Technology	-	-
Utilities	-	-

Return for Risk

XLE vs. VDE — Risk / Return Rank

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

XLE

XLE Risk / Return Rank: 66
XLE Sharpe Ratio Rank: 69
XLE Sortino Ratio Rank: 62
XLE Omega Ratio Rank: 60
XLE Calmar Ratio Rank: 76
XLE Martin Ratio Rank: 62

VDE

VDE Risk / Return Rank: 67
VDE Sharpe Ratio Rank: 70
VDE Sortino Ratio Rank: 63
VDE Omega Ratio Rank: 60
VDE Calmar Ratio Rank: 78
VDE Martin Ratio Rank: 64

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. VDE - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for State Street Energy Select Sector SPDR ETF (XLE) and Vanguard Energy ETF (VDE). 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.

	XLE	VDE	Difference
Sharpe ratio: Return per unit of total volatility	2.23	2.25	-0.02
Sortino ratio: Return per unit of downside risk	2.86	2.87	-0.01
Omega ratio: Gain probability vs. loss probability	1.36	1.36	0.00
Calmar ratio: Return relative to maximum drawdown	3.79	3.88	-0.09
Martin ratio: Return relative to average drawdown	10.90	11.27	-0.38
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

XLE vs. VDE - Sharpe Ratio Comparison

The current XLE Sharpe Ratio is 2.23, which is comparable to the VDE Sharpe Ratio of 2.25. The chart below compares the historical Sharpe Ratios of XLE and VDE, 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

	XLE	VDE	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	2.23	2.25	-0.02
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	0.77	0.76	+0.01
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	0.32	0.30	+0.02
Sharpe Ratio (All Time) Calculated using the full available price history	0.31	0.28	+0.03

Drawdowns

XLE vs. VDE - Drawdown Comparison

The maximum XLE drawdown since its inception was -71.26%, roughly equal to the maximum VDE drawdown of -74.20%. Use the drawdown chart below to compare losses from any high point for XLE and VDE.

Drawdown Indicators

	XLE	VDE	Difference
Max Drawdown Largest peak-to-trough decline	-71.26%	-74.20%	+2.94%
Max Drawdown (1Y) Largest decline over 1 year	-12.05%	-11.80%	-0.25%
Max Drawdown (3Y) Largest decline over 3 years	-20.14%	-21.41%	+1.27%
Max Drawdown (5Y) Largest decline over 5 years	-26.04%	-26.58%	+0.54%
Max Drawdown (10Y) Largest decline over 10 years	-66.81%	-69.29%	+2.48%
Current Drawdown Current decline from peak	-7.82%	-8.25%	+0.43%
Average Drawdown Average peak-to-trough decline	-17.98%	-19.96%	+1.98%
Ulcer Index Depth and duration of drawdowns from previous peaks	4.18%	4.05%	+0.13%

Volatility

XLE vs. VDE - Volatility Comparison

State Street Energy Select Sector SPDR ETF (XLE) and Vanguard Energy ETF (VDE) have volatilities of 7.29% and 7.16%, respectively, indicating that both stocks experience similar levels of price fluctuations. This suggests that the risk associated with both stocks, as measured by volatility, is nearly the same. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	XLE	VDE	Difference
Volatility (1M) Calculated over the trailing 1-month period	7.29%	7.16%	+0.13%
Volatility (6M) Calculated over the trailing 6-month period	16.56%	16.33%	+0.23%
Volatility (1Y) Calculated over the trailing 1-year period	20.49%	20.37%	+0.12%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	26.02%	26.41%	-0.39%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	29.58%	29.93%	-0.35%

XLE vs. VDE - Expense Ratio Comparison

XLE has a 0.08% expense ratio, which is lower than VDE's 0.09% expense ratio. Despite the difference, both funds are considered low-cost compared to the broader market, where average expense ratios usually range from 0.3% to 0.9%.

Dividends

XLE vs. VDE - Dividend Comparison

XLE's dividend yield for the trailing twelve months is around 2.59%, more than VDE's 2.42% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
VDE Vanguard Energy ETF	2.42%	3.11%	3.23%	3.34%	3.65%	4.13%	4.76%	3.42%	3.35%	2.90%	2.31%	3.17%
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

Can I hold both XLE and VDE in my portfolio?

With a correlation of 0.99, XLE and VDE 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, XLE or VDE?

XLE has higher volatility (7.29%) compared to VDE (7.16%). In terms of maximum drawdown, XLE dropped -71.26% vs VDE's -74.20%.

Which ETF is better, XLE or VDE?

On 10-year performance, XLE leads with 9.54% vs 8.99% for VDE. On fees, XLE is cheaper at 0.08% per year. On volatility, VDE has been the lower-risk option at 7.16%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, XLE or VDE?

Over the 10-year period, XLE has performed better with a 9.54% return vs 8.99%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, XLE or VDE?

XLE is cheaper with a 0.08% expense ratio, compared with 0.09% for VDE.

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

XLE has the higher dividend yield at 2.59%, compared with 2.42% for VDE.

What is the main difference between XLE and VDE?

XLE tracks Energy Select Sector Index, while VDE tracks MSCI US Investable Market Energy 25/50 Index. They also come from different issuers: State Street and Vanguard. Their fees differ too: 0.08% for XLE and 0.09% for VDE.

Which has better risk-adjusted returns?

VDE currently has the higher Sharpe Ratio (2.25 vs 2.23), 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.