XLK vs. VNQ
XLK (State Street Technology Select Sector SPDR ETF) and VNQ (Vanguard Real Estate ETF) are both exchange-traded funds - XLK is a Technology Equities fund tracking the S&P Technology Select Sector Daily Capped 35/20 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 10 years, XLK returned 25.19%/yr vs 5.65%/yr for VNQ. A 0.51 correlation means they provide meaningful diversification when combined. XLK charges 0.08%/yr vs 0.13%/yr for VNQ.
Performance
XLK vs. VNQ - Performance Comparison
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Returns By Period
In the year-to-date period, XLK achieves a 28.52% return, which is significantly higher than VNQ's 12.51% return. Over the past 10 years, XLK has outperformed VNQ with an annualized return of 25.19%, while VNQ has yielded a comparatively lower 5.65% annualized return.
XLK
- 1D
- 0.87%
- 1M
- 2.95%
- YTD
- 28.52%
- 6M
- 28.96%
- 1Y
- 55.42%
- 3Y*
- 30.28%
- 5Y*
- 22.02%
- 10Y*
- 25.19%
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%
XLK vs. VNQ - Yearly Performance Comparison
| 2026 (YTD) | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | |
|---|---|---|---|---|---|---|---|---|---|---|
XLK State Street Technology Select Sector SPDR ETF | 28.52% | 24.61% | 21.63% | 56.02% | -27.73% | 34.74% | 43.62% | 49.86% | -1.68% | 34.26% |
VNQ Vanguard Real Estate ETF | 12.51% | 3.24% | 4.81% | 11.85% | -26.25% | 40.54% | -4.61% | 28.91% | -6.03% | 4.90% |
Correlation
The correlation between XLK and VNQ is 0.06, 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 | 0.06 |
Correlation (3Y) Calculated over the trailing 3-year period | 0.23 |
Correlation (5Y) Calculated over the trailing 5-year period | 0.42 |
Correlation (10Y) Calculated over the trailing 10-year period | 0.41 |
Correlation (All Time) Calculated using the full available price history since Sep 29, 2004 | 0.51 |
Over the past year, the correlation between XLK and VNQ has dropped to 0.06 - well below their long-term average of 0.51, suggesting their price drivers have been diverging.
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Return for Risk
XLK vs. VNQ — Risk / Return Rank
XLK
VNQ
XLK vs. VNQ - Risk-Adjusted Trends Comparison
This table presents a comparison of risk-adjusted performance metrics for State Street Technology Select Sector SPDR ETF (XLK) 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.
| XLK | VNQ | Difference | |
|---|---|---|---|
| Sharpe ratioReturn per unit of total volatility | +1.42 | ||
| Sortino ratioReturn per unit of downside risk | +1.52 | ||
| Omega ratioGain probability vs. loss probability | 1.39 | 1.17 | +0.22 |
| Calmar ratioReturn relative to maximum drawdown | 3.36 | 1.56 | +1.80 |
| Martin ratioReturn relative to average drawdown | 10.85 | 4.90 | +5.95 |
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Drawdowns
XLK vs. VNQ - Drawdown Comparison
The maximum XLK drawdown since its inception was -82.05%, which is greater than VNQ's maximum drawdown of -73.07%. Use the drawdown chart below to compare losses from any high point for XLK and VNQ.
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Drawdown Indicators
| XLK | VNQ | Difference | |
|---|---|---|---|
Max DrawdownLargest peak-to-trough decline | -82.05% | -73.07% | -8.98% |
Max Drawdown (1Y)Largest decline over 1 year | -15.92% | -8.34% | -7.58% |
Max Drawdown (3Y)Largest decline over 3 years | -25.66% | -17.46% | -8.20% |
Max Drawdown (5Y)Largest decline over 5 years | -33.56% | -34.48% | +0.92% |
Max Drawdown (10Y)Largest decline over 10 years | -33.56% | -42.40% | +8.84% |
Current DrawdownCurrent decline from peak | -6.77% | 0.00% | -6.77% |
Average DrawdownAverage peak-to-trough decline | -34.93% | -13.61% | -21.32% |
Ulcer IndexDepth and duration of drawdowns from previous peaks | 4.92% | 2.65% | +2.27% |
Volatility
XLK vs. VNQ - Volatility Comparison
State Street Technology Select Sector SPDR ETF (XLK) has a higher volatility of 10.86% compared to Vanguard Real Estate ETF (VNQ) at 4.72%. This indicates that XLK's price experiences larger fluctuations and is considered to be riskier 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
| XLK | VNQ | Difference | |
|---|---|---|---|
Volatility (1M)Calculated over the trailing 1-month period | 10.86% | 4.72% | +6.14% |
Volatility (6M)Calculated over the trailing 6-month period | 18.92% | 9.77% | +9.15% |
Volatility (1Y)Calculated over the trailing 1-year period | 22.55% | 13.54% | +9.01% |
Volatility (5Y)Calculated over the trailing 5-year period, annualized | 25.18% | 18.84% | +6.34% |
Volatility (10Y)Calculated over the trailing 10-year period, annualized | 24.64% | 20.72% | +3.92% |
XLK vs. VNQ - Expense Ratio Comparison
XLK has a 0.08% expense ratio, which is lower than VNQ's 0.13% 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
XLK vs. VNQ - Dividend Comparison
XLK's dividend yield for the trailing twelve months is around 0.41%, 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% |
XLK State Street Technology Select Sector SPDR ETF | 0.41% | 0.54% | 0.66% | 0.76% | 1.04% | 0.65% | 0.92% | 1.16% | 1.60% | 1.37% | 1.74% | 1.79% |
Frequently Asked Questions
XLK and VNQ have a correlation of 0.06, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.
XLK has higher volatility (10.86%) compared to VNQ (4.72%). In terms of maximum drawdown, XLK dropped -82.05% vs VNQ's -73.07%.
On 10-year performance, XLK leads with 25.19% vs 5.65% for VNQ. On fees, XLK is cheaper at 0.08% per year. On volatility, VNQ has been the lower-risk option at 4.72%. The better choice depends on whether you care most about return, fees, risk, or income.
Over the 10-year period, XLK has performed better with a 25.19% return vs 5.65%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.
XLK is cheaper with a 0.08% expense ratio, compared with 0.13% for VNQ.
VNQ has the higher dividend yield at 3.54%, compared with 0.41% for XLK.
XLK is categorized as Technology Equities, while VNQ is REIT. XLK tracks S&P Technology Select Sector Daily Capped 35/20 Index, while VNQ tracks MSCI US Investable Market Real Estate 25/50 Index. They also come from different issuers: State Street and Vanguard. Their fees differ too: 0.08% for XLK and 0.13% for VNQ.
XLK currently has the higher Sharpe Ratio (2.37 vs 0.96), 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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