XLF vs. VFH

Last updated Jun 20, 2026

XLF (State Street Financial Select Sector SPDR ETF) and VFH (Vanguard Financials ETF) are both Financials Equities funds - XLF tracks the Financial Select Sector Index while VFH tracks the MSCI US Investable Market Financials 25/50 Index. Both are passively managed. Over the past 10 years, XLF returned 13.28%/yr vs 13.08%/yr for VFH. With a 0.98 correlation, they move nearly in lockstep. XLF charges 0.08%/yr vs 0.09%/yr for VFH.

Performance

XLF vs. VFH - Performance Comparison

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

Returns By Period

In the year-to-date period, XLF achieves a -1.69% return, which is significantly lower than VFH's -1.23% return. Both investments have delivered pretty close results over the past 10 years, with XLF having a 13.28% annualized return and VFH not far behind at 13.08%.

XLF

• 1D: -0.89%
• 1M: 3.56%
• YTD: -1.69%
• 6M: -1.47%
• 1Y: 8.02%
• 3Y*: 18.75%
• 5Y*: 10.65%
• 10Y*: 13.28%

VFH

• 1D: -0.73%
• 1M: 3.49%
• YTD: -1.23%
• 6M: -1.34%
• 1Y: 9.25%
• 3Y*: 19.63%
• 5Y*: 10.78%
• 10Y*: 13.08%

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

XLF vs. VFH - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
XLF State Street Financial Select Sector SPDR ETF	-1.69%	14.90%	30.56%	12.03%	-10.59%	34.80%	-1.74%	31.88%	-13.06%	22.00%
VFH Vanguard Financials ETF	-1.23%	14.91%	30.44%	14.17%	-12.31%	35.22%	-1.96%	31.57%	-13.52%	19.99%

Correlation

The correlation between XLF and VFH 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	0.99
Correlation (10Y) Calculated over the trailing 10-year period	0.99
Correlation (All Time) Calculated using the full available price history since Jan 30, 2004	0.98

The correlation between XLF and VFH has been stable across timeframes, ranging from 0.98 to 0.99 - a consistent structural relationship.

XLF vs. VFH - Sectors Allocation Comparison

Sectors	XLF	VFH
Financial Services	98.0%	96.8%
Technology	1.8%	2.1%
Industrials	0.2%	0.2%
Basic Materials	-	-
Communication Services	-	0.0%
Consumer Cyclical	-	0.0%
Consumer Defensive	-	-
Energy	-	-
Healthcare	-	0.1%
Real Estate	-	0.8%
Utilities	-	-

Return for Risk

XLF vs. VFH — Risk / Return Rank

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

XLF

XLF Risk / Return Rank: 16
XLF Sharpe Ratio Rank: 18
XLF Sortino Ratio Rank: 17
XLF Omega Ratio Rank: 16
XLF Calmar Ratio Rank: 15
XLF Martin Ratio Rank: 15

VFH

VFH Risk / Return Rank: 18
VFH Sharpe Ratio Rank: 19
VFH Sortino Ratio Rank: 18
VFH Omega Ratio Rank: 18
VFH Calmar Ratio Rank: 16
VFH Martin Ratio Rank: 17

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.

XLF vs. VFH - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for State Street Financial Select Sector SPDR ETF (XLF) and Vanguard Financials ETF (VFH). 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.

	XLF	VFH	Difference
Sharpe ratio: Return per unit of total volatility	0.57	0.65	-0.07
Sortino ratio: Return per unit of downside risk	0.86	0.96	-0.10
Omega ratio: Gain probability vs. loss probability	1.11	1.12	-0.01
Calmar ratio: Return relative to maximum drawdown	0.56	0.65	-0.09
Martin ratio: Return relative to average drawdown	1.44	1.70	-0.26

XLF vs. VFH - Sharpe Ratio Comparison

The current XLF Sharpe Ratio is 0.57, which is comparable to the VFH Sharpe Ratio of 0.65. The chart below compares the historical Sharpe Ratios of XLF and VFH, 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

XLF vs. VFH - Drawdown Comparison

The maximum XLF drawdown since its inception was -82.69%, which is greater than VFH's maximum drawdown of -78.61%. Use the drawdown chart below to compare losses from any high point for XLF and VFH.

Drawdown Indicators

	XLF	VFH	Difference
Max Drawdown Largest peak-to-trough decline	-82.69%	-78.61%	-4.08%
Max Drawdown (1Y) Largest decline over 1 year	-14.79%	-14.75%	-0.04%
Max Drawdown (3Y) Largest decline over 3 years	-15.54%	-17.30%	+1.76%
Max Drawdown (5Y) Largest decline over 5 years	-25.81%	-25.66%	-0.15%
Max Drawdown (10Y) Largest decline over 10 years	-42.86%	-44.42%	+1.56%
Current Drawdown Current decline from peak	-4.53%	-4.22%	-0.31%
Average Drawdown Average peak-to-trough decline	-20.00%	-18.51%	-1.49%
Ulcer Index Depth and duration of drawdowns from previous peaks	5.78%	5.66%	+0.12%

Volatility

XLF vs. VFH - Volatility Comparison

State Street Financial Select Sector SPDR ETF (XLF) and Vanguard Financials ETF (VFH) have volatilities of 4.20% and 4.29%, 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

	XLF	VFH	Difference
Volatility (1M) Calculated over the trailing 1-month period	4.20%	4.29%	-0.09%
Volatility (6M) Calculated over the trailing 6-month period	11.25%	11.40%	-0.15%
Volatility (1Y) Calculated over the trailing 1-year period	14.60%	14.94%	-0.34%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	18.59%	19.28%	-0.69%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	22.17%	22.55%	-0.38%

XLF vs. VFH - Expense Ratio Comparison

XLF has a 0.08% expense ratio, which is lower than VFH'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

XLF vs. VFH - Dividend Comparison

XLF's dividend yield for the trailing twelve months is around 1.48%, which matches VFH's 1.48% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
VFH Vanguard Financials ETF	1.48%	1.55%	1.75%	2.08%	2.31%	1.87%	2.21%	2.17%	2.30%	1.53%	1.63%	2.00%
XLF State Street Financial Select Sector SPDR ETF	1.48%	1.31%	1.42%	1.71%	2.04%	1.63%	2.03%	1.87%	2.08%	1.48%	21.10%	1.95%

Frequently Asked Questions

Can I hold both XLF and VFH in my portfolio?

With a correlation of 0.99, XLF and VFH 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, XLF or VFH?

VFH has higher volatility (4.29%) compared to XLF (4.20%). In terms of maximum drawdown, XLF dropped -82.69% vs VFH's -78.61%.

Which ETF is better, XLF or VFH?

On 10-year performance, XLF leads with 13.28% vs 13.08% for VFH. On fees, XLF is cheaper at 0.08% per year. Their volatility is very similar. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, XLF or VFH?

Over the 10-year period, XLF has performed better with a 13.28% return vs 13.08%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, XLF or VFH?

XLF is cheaper with a 0.08% expense ratio, compared with 0.09% for VFH.

Which ETF pays a higher dividend yield, XLF or VFH?

XLF and VFH have nearly identical dividend yields, around 1.48%.

What is the main difference between XLF and VFH?

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

Which has better risk-adjusted returns?

VFH currently has the higher Sharpe Ratio (0.65 vs 0.57), 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.