XLF vs. XLU

Last updated Jun 4, 2026

XLF (State Street Financial Select Sector SPDR ETF) and XLU (State Street Utilities Select Sector SPDR ETF) are both exchange-traded funds - XLF is a Financials Equities fund tracking the Financial 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, XLF returned 12.38%/yr vs 9.15%/yr for XLU. At a 0.41 correlation, their price movements are largely independent. Both charge a 0.08% expense ratio.

Performance

XLF vs. XLU - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in State Street Financial Select Sector SPDR ETF (XLF) 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, XLF achieves a -6.64% return, which is significantly lower than XLU's 3.11% return. Over the past 10 years, XLF has outperformed XLU with an annualized return of 12.38%, while XLU has yielded a comparatively lower 9.15% annualized return.

XLF

• 1D: -1.15%
• 1M: -1.38%
• YTD: -6.64%
• 6M: -4.18%
• 1Y: 1.13%
• 3Y*: 17.64%
• 5Y*: 7.61%
• 10Y*: 12.38%

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)

XLF vs. XLU - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
XLF State Street Financial Select Sector SPDR ETF	-6.64%	14.90%	30.56%	12.03%	-10.59%	34.80%	-1.74%	31.88%	-13.06%	22.00%
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 XLF and XLU is 0.18, which is low. Their price movements are largely independent, making them effective diversification partners.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.18
Correlation (3Y) Calculated over the trailing 3-year period	0.35
Correlation (5Y) Calculated over the trailing 5-year period	0.38
Correlation (10Y) Calculated over the trailing 10-year period	0.28
Correlation (All Time) Calculated using the full available price history since Dec 23, 1998	0.41

Over the past year, the correlation between XLF and XLU has dropped to 0.18 - well below their long-term average of 0.41, suggesting their price drivers have been diverging.

XLF vs. XLU - Sectors Allocation Comparison

Sectors	XLF	XLU
Financial Services	98.0%	-
Technology	1.8%	-
Industrials	0.2%	-
Basic Materials	-	-
Communication Services	-	-
Consumer Cyclical	-	-
Consumer Defensive	-	-
Energy	-	-
Healthcare	-	-
Real Estate	-	-
Utilities	-	100.0%

Return for Risk

XLF vs. XLU — Risk / Return Rank

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

XLF

XLF Risk / Return Rank: 9
XLF Sharpe Ratio Rank: 9
XLF Sortino Ratio Rank: 9
XLF Omega Ratio Rank: 9
XLF Calmar Ratio Rank: 9
XLF Martin Ratio Rank: 9

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.

XLF vs. XLU - Risk-Adjusted Trends Comparison

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

	XLF	XLU	Difference
Sharpe ratio: Return per unit of total volatility	0.08	0.63	-0.55
Sortino ratio: Return per unit of downside risk	0.20	0.94	-0.74
Omega ratio: Gain probability vs. loss probability	1.02	1.12	-0.09
Calmar ratio: Return relative to maximum drawdown	0.08	1.00	-0.92
Martin ratio: Return relative to average drawdown	0.20	2.24	-2.04
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

XLF vs. XLU - Sharpe Ratio Comparison

The current XLF Sharpe Ratio is 0.08, which is lower than the XLU Sharpe Ratio of 0.63. The chart below compares the historical Sharpe Ratios of XLF 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

	XLF	XLU	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	0.08	0.63	-0.55
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	0.41	0.54	-0.13
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	0.56	0.48	+0.08
Sharpe Ratio (All Time) Calculated using the full available price history	0.20	0.40	-0.20

Drawdowns

XLF vs. XLU - Drawdown Comparison

The maximum XLF drawdown since its inception was -82.69%, which is greater than XLU's maximum drawdown of -51.98%. Use the drawdown chart below to compare losses from any high point for XLF and XLU.

Drawdown Indicators

	XLF	XLU	Difference
Max Drawdown Largest peak-to-trough decline	-82.69%	-51.98%	-30.71%
Max Drawdown (1Y) Largest decline over 1 year	-14.79%	-9.18%	-5.61%
Max Drawdown (3Y) Largest decline over 3 years	-15.54%	-17.26%	+1.72%
Max Drawdown (5Y) Largest decline over 5 years	-25.81%	-25.26%	-0.55%
Max Drawdown (10Y) Largest decline over 10 years	-42.86%	-36.07%	-6.79%
Current Drawdown Current decline from peak	-9.34%	-7.78%	-1.56%
Average Drawdown Average peak-to-trough decline	-20.03%	-10.22%	-9.81%
Ulcer Index Depth and duration of drawdowns from previous peaks	5.66%	4.09%	+1.57%

Volatility

XLF vs. XLU - Volatility Comparison

The current volatility for State Street Financial Select Sector SPDR ETF (XLF) is 3.29%, while State Street Utilities Select Sector SPDR ETF (XLU) has a volatility of 5.41%. This indicates that XLF experiences smaller price fluctuations and is considered to be less risky than XLU based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	XLF	XLU	Difference
Volatility (1M) Calculated over the trailing 1-month period	3.29%	5.41%	-2.12%
Volatility (6M) Calculated over the trailing 6-month period	10.94%	11.53%	-0.59%
Volatility (1Y) Calculated over the trailing 1-year period	14.41%	14.57%	-0.16%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	18.63%	17.32%	+1.31%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	22.16%	19.26%	+2.90%

XLF vs. XLU - Expense Ratio Comparison

Both XLF and XLU have an expense ratio of 0.08%, making them cost-effective options compared to the broader market, where average expense ratios typically range from 0.3% to 0.9%.

Dividends

XLF vs. XLU - Dividend Comparison

XLF's dividend yield for the trailing twelve months is around 1.56%, less than XLU's 2.72% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
XLF State Street Financial Select Sector SPDR ETF	1.56%	1.31%	1.42%	1.71%	2.04%	1.63%	2.03%	1.87%	2.08%	1.48%	21.10%	1.95%
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 XLF and XLU in my portfolio?

XLF and XLU have a correlation of 0.18, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, XLF or XLU?

XLU has higher volatility (5.41%) compared to XLF (3.29%). In terms of maximum drawdown, XLF dropped -82.69% vs XLU's -51.98%.

Which ETF is better, XLF or XLU?

On 10-year performance, XLF leads with 12.38% vs 9.15% for XLU. Both ETFs have the same 0.08% expense ratio. On volatility, XLF has been the lower-risk option at 3.29%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, XLF or XLU?

Over the 10-year period, XLF has performed better with a 12.38% return vs 9.15%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, XLF or XLU?

XLF and XLU have the same expense ratio: 0.08% per year.

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

XLU has the higher dividend yield at 2.72%, compared with 1.56% for XLF.

What is the main difference between XLF and XLU?

XLF is categorized as Financials Equities, while XLU is Utilities Equities. XLF tracks Financial Select Sector Index, while XLU tracks Utilities Select Sector Index.

Which has better risk-adjusted returns?

XLU currently has the higher Sharpe Ratio (0.63 vs 0.08), 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.