XLP vs. VGSH

Last updated Jun 9, 2026

XLP (State Street Consumer Staples Select Sector SPDR ETF) and VGSH (Vanguard Short-Term Treasury ETF) are both exchange-traded funds - XLP is a Consumer Staples Equities fund tracking the Consumer Staples Select Sector Index, while VGSH is a Government Bonds fund tracking the Bloomberg U.S. Treasury 1-3 Year Index. Both are passively managed. Over the past 10 years, XLP returned 7.21%/yr vs 1.71%/yr for VGSH. At a correlation of -0.02, they often move in opposite directions. XLP charges 0.08%/yr vs 0.03%/yr for VGSH.

Performance

XLP vs. VGSH - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in State Street Consumer Staples Select Sector SPDR ETF (XLP) and Vanguard Short-Term Treasury ETF (VGSH). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, XLP achieves a 7.54% return, which is significantly higher than VGSH's 0.36% return. Over the past 10 years, XLP has outperformed VGSH with an annualized return of 7.21%, while VGSH has yielded a comparatively lower 1.71% annualized return.

XLP

• 1D: -0.44%
• 1M: -1.32%
• YTD: 7.54%
• 6M: 8.22%
• 1Y: 4.50%
• 3Y*: 7.23%
• 5Y*: 6.10%
• 10Y*: 7.21%

VGSH

• 1D: 0.00%
• 1M: -0.20%
• YTD: 0.36%
• 6M: 0.76%
• 1Y: 3.41%
• 3Y*: 4.14%
• 5Y*: 1.79%
• 10Y*: 1.71%

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

XLP vs. VGSH - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
XLP State Street Consumer Staples Select Sector SPDR ETF	7.54%	1.52%	12.20%	-0.82%	-0.81%	17.20%	10.11%	27.43%	-8.07%	12.98%
VGSH Vanguard Short-Term Treasury ETF	0.36%	5.07%	4.00%	4.31%	-3.86%	-0.60%	3.04%	3.52%	1.55%	0.04%

Correlation

The correlation between XLP and VGSH is 0.27, which is low. Their price movements are largely independent, making them effective diversification partners.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.27
Correlation (3Y) Calculated over the trailing 3-year period	0.15
Correlation (5Y) Calculated over the trailing 5-year period	0.16
Correlation (10Y) Calculated over the trailing 10-year period	0.06
Correlation (All Time) Calculated using the full available price history since Nov 23, 2009	-0.02

The correlation between XLP and VGSH shifts across timeframes, from -0.02 (all time) to 0.27 (1 year), reflecting how their relationship changes across market environments.

Return for Risk

XLP vs. VGSH — Risk / Return Rank

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

XLP

XLP Risk / Return Rank: 15
XLP Sharpe Ratio Rank: 15
XLP Sortino Ratio Rank: 15
XLP Omega Ratio Rank: 14
XLP Calmar Ratio Rank: 15
XLP Martin Ratio Rank: 14

VGSH

VGSH Risk / Return Rank: 88
VGSH Sharpe Ratio Rank: 89
VGSH Sortino Ratio Rank: 94
VGSH Omega Ratio Rank: 92
VGSH Calmar Ratio Rank: 81
VGSH Martin Ratio Rank: 83

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.

XLP vs. VGSH - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for State Street Consumer Staples Select Sector SPDR ETF (XLP) and Vanguard Short-Term Treasury ETF (VGSH). 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.

	XLP	VGSH	Difference
Sharpe ratio: Return per unit of total volatility	0.36	2.69	-2.34
Sortino ratio: Return per unit of downside risk	0.60	4.44	-3.85
Omega ratio: Gain probability vs. loss probability	1.07	1.57	-0.51
Calmar ratio: Return relative to maximum drawdown	0.47	3.88	-3.41
Martin ratio: Return relative to average drawdown	0.91	15.29	-14.39
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

XLP vs. VGSH - Sharpe Ratio Comparison

The current XLP Sharpe Ratio is 0.36, which is lower than the VGSH Sharpe Ratio of 2.69. The chart below compares the historical Sharpe Ratios of XLP and VGSH, 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

	XLP	VGSH	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	0.36	2.69	-2.34
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	0.46	0.91	-0.45
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	0.49	1.09	-0.60
Sharpe Ratio (All Time) Calculated using the full available price history	0.44	1.01	-0.57

Drawdowns

XLP vs. VGSH - Drawdown Comparison

The maximum XLP drawdown since its inception was -35.90%, which is greater than VGSH's maximum drawdown of -5.70%. Use the drawdown chart below to compare losses from any high point for XLP and VGSH.

Drawdown Indicators

	XLP	VGSH	Difference
Max Drawdown Largest peak-to-trough decline	-35.90%	-5.70%	-30.20%
Max Drawdown (1Y) Largest decline over 1 year	-9.69%	-0.88%	-8.81%
Max Drawdown (3Y) Largest decline over 3 years	-12.39%	-0.97%	-11.42%
Max Drawdown (5Y) Largest decline over 5 years	-16.30%	-5.66%	-10.64%
Max Drawdown (10Y) Largest decline over 10 years	-24.51%	-5.70%	-18.81%
Current Drawdown Current decline from peak	-7.19%	-0.41%	-6.78%
Average Drawdown Average peak-to-trough decline	-7.06%	-0.60%	-6.46%
Ulcer Index Depth and duration of drawdowns from previous peaks	4.97%	0.22%	+4.75%

Volatility

XLP vs. VGSH - Volatility Comparison

State Street Consumer Staples Select Sector SPDR ETF (XLP) has a higher volatility of 4.30% compared to Vanguard Short-Term Treasury ETF (VGSH) at 0.35%. This indicates that XLP's price experiences larger fluctuations and is considered to be riskier than VGSH based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	XLP	VGSH	Difference
Volatility (1M) Calculated over the trailing 1-month period	4.30%	0.35%	+3.95%
Volatility (6M) Calculated over the trailing 6-month period	9.97%	0.89%	+9.08%
Volatility (1Y) Calculated over the trailing 1-year period	12.75%	1.28%	+11.47%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	13.31%	1.97%	+11.34%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	14.74%	1.58%	+13.16%

XLP vs. VGSH - Expense Ratio Comparison

XLP has a 0.08% expense ratio, which is higher than VGSH's 0.03% expense ratio. However, both funds are considered low-cost compared to the broader market, where average expense ratios usually range from 0.3% to 0.9%.

Dividends

XLP vs. VGSH - Dividend Comparison

XLP's dividend yield for the trailing twelve months is around 2.62%, less than VGSH's 3.88% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
VGSH Vanguard Short-Term Treasury ETF	3.88%	4.00%	4.18%	3.31%	1.15%	0.66%	1.74%	2.28%	1.79%	1.10%	0.84%	0.69%
XLP State Street Consumer Staples Select Sector SPDR ETF	2.62%	2.75%	2.77%	2.63%	2.47%	2.28%	2.50%	2.57%	3.04%	2.62%	2.53%	2.52%

Frequently Asked Questions

Can I hold both XLP and VGSH in my portfolio?

XLP and VGSH have a correlation of 0.27, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, XLP or VGSH?

XLP has higher volatility (4.30%) compared to VGSH (0.35%). In terms of maximum drawdown, XLP dropped -35.90% vs VGSH's -5.70%.

Which ETF is better, XLP or VGSH?

On 10-year performance, XLP leads with 7.21% vs 1.71% for VGSH. On fees, VGSH is cheaper at 0.03% per year. On volatility, VGSH has been the lower-risk option at 0.35%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, XLP or VGSH?

Over the 10-year period, XLP has performed better with a 7.21% return vs 1.71%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, XLP or VGSH?

VGSH is cheaper with a 0.03% expense ratio, compared with 0.08% for XLP.

Which ETF pays a higher dividend yield, XLP or VGSH?

VGSH has the higher dividend yield at 3.88%, compared with 2.62% for XLP.

What is the main difference between XLP and VGSH?

XLP is categorized as Consumer Staples Equities, while VGSH is Government Bonds. XLP tracks Consumer Staples Select Sector Index, while VGSH tracks Bloomberg U.S. Treasury 1-3 Year Index. They also come from different issuers: State Street and Vanguard. Their fees differ too: 0.08% for XLP and 0.03% for VGSH.

Which has better risk-adjusted returns?

VGSH currently has the higher Sharpe Ratio (2.69 vs 0.36), 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.