XLRE vs. XHB

Last updated Jun 4, 2026

XLRE (Real Estate Select Sector SPDR Fund) and XHB (SPDR S&P Homebuilders ETF) are both exchange-traded funds - XLRE is a REIT fund tracking the Real Estate Select Sector Index, while XHB is a Building & Construction fund tracking the S&P Homebuilders Select Industry Index. Both are passively managed. Over the past 10 years, XLRE returned 6.68%/yr vs 12.71%/yr for XHB. A 0.53 correlation means they provide meaningful diversification when combined. XLRE charges 0.13%/yr vs 0.35%/yr for XHB.

Performance

XLRE vs. XHB - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Real Estate Select Sector SPDR Fund (XLRE) and SPDR S&P Homebuilders ETF (XHB). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, XLRE achieves a 8.56% return, which is significantly higher than XHB's 1.06% return. Over the past 10 years, XLRE has underperformed XHB with an annualized return of 6.68%, while XHB has yielded a comparatively higher 12.71% annualized return.

XLRE

• 1D: 0.05%
• 1M: -1.29%
• YTD: 8.56%
• 6M: 7.82%
• 1Y: 8.12%
• 3Y*: 9.43%
• 5Y*: 2.86%
• 10Y*: 6.68%

XHB

• 1D: -0.41%
• 1M: 2.46%
• YTD: 1.06%
• 6M: -4.89%
• 1Y: 10.40%
• 3Y*: 13.48%
• 5Y*: 8.00%
• 10Y*: 12.71%

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

XLRE vs. XHB - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
XLRE Real Estate Select Sector SPDR Fund	8.56%	2.63%	5.09%	12.36%	-26.25%	46.10%	-2.18%	28.68%	-2.39%	10.69%
XHB SPDR S&P Homebuilders ETF	1.06%	-0.69%	9.87%	60.10%	-28.93%	49.70%	27.97%	41.30%	-25.73%	31.80%

Correlation

The correlation between XLRE and XHB is 0.55, which is moderate. They share some common price drivers but move independently often enough to provide real diversification benefit when combined.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.55
Correlation (3Y) Calculated over the trailing 3-year period	0.59
Correlation (5Y) Calculated over the trailing 5-year period	0.61
Correlation (10Y) Calculated over the trailing 10-year period	0.53
Correlation (All Time) Calculated using the full available price history since Oct 9, 2015	0.53

The correlation between XLRE and XHB has been stable across timeframes, ranging from 0.53 to 0.61 - a consistent structural relationship.

XLRE vs. XHB - Sectors Allocation Comparison

Sectors	XLRE	XHB
Real Estate	98.1%	1.1%
Basic Materials	1.8%	-
Communication Services	-	-
Consumer Cyclical	-	60.8%
Consumer Defensive	-	-
Energy	-	-
Financial Services	-	-
Healthcare	-	-
Industrials	-	38.1%
Technology	-	-
Utilities	-	-

Return for Risk

XLRE vs. XHB — Risk / Return Rank

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

XLRE

XLRE Risk / Return Rank: 19
XLRE Sharpe Ratio Rank: 18
XLRE Sortino Ratio Rank: 17
XLRE Omega Ratio Rank: 17
XLRE Calmar Ratio Rank: 21
XLRE Martin Ratio Rank: 22

XHB

XHB Risk / Return Rank: 14
XHB Sharpe Ratio Rank: 14
XHB Sortino Ratio Rank: 16
XHB Omega Ratio Rank: 15
XHB Calmar Ratio Rank: 14
XHB Martin Ratio Rank: 13

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.

XLRE vs. XHB - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Real Estate Select Sector SPDR Fund (XLRE) and SPDR S&P Homebuilders ETF (XHB). 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.

	XLRE	XHB	Difference
Sharpe ratio: Return per unit of total volatility	0.61	0.38	+0.23
Sortino ratio: Return per unit of downside risk	0.90	0.80	+0.10
Omega ratio: Gain probability vs. loss probability	1.11	1.09	+0.03
Calmar ratio: Return relative to maximum drawdown	0.98	0.48	+0.50
Martin ratio: Return relative to average drawdown	2.69	1.01	+1.68
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

XLRE vs. XHB - Sharpe Ratio Comparison

The current XLRE Sharpe Ratio is 0.61, which is higher than the XHB Sharpe Ratio of 0.38. The chart below compares the historical Sharpe Ratios of XLRE and XHB, 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

	XLRE	XHB	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	0.61	0.38	+0.23
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	0.15	0.29	-0.14
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	0.33	0.47	-0.14
Sharpe Ratio (All Time) Calculated using the full available price history	0.35	0.16	+0.19

Drawdowns

XLRE vs. XHB - Drawdown Comparison

The maximum XLRE drawdown since its inception was -38.83%, smaller than the maximum XHB drawdown of -81.61%. Use the drawdown chart below to compare losses from any high point for XLRE and XHB.

Drawdown Indicators

	XLRE	XHB	Difference
Max Drawdown Largest peak-to-trough decline	-38.83%	-81.61%	+42.78%
Max Drawdown (1Y) Largest decline over 1 year	-8.33%	-21.71%	+13.38%
Max Drawdown (3Y) Largest decline over 3 years	-16.74%	-30.53%	+13.79%
Max Drawdown (5Y) Largest decline over 5 years	-34.12%	-39.46%	+5.34%
Max Drawdown (10Y) Largest decline over 10 years	-38.83%	-49.57%	+10.74%
Current Drawdown Current decline from peak	-2.98%	-16.32%	+13.34%
Average Drawdown Average peak-to-trough decline	-9.61%	-27.60%	+17.99%
Ulcer Index Depth and duration of drawdowns from previous peaks	3.03%	10.29%	-7.26%

Volatility

XLRE vs. XHB - Volatility Comparison

The current volatility for Real Estate Select Sector SPDR Fund (XLRE) is 3.71%, while SPDR S&P Homebuilders ETF (XHB) has a volatility of 8.43%. This indicates that XLRE experiences smaller price fluctuations and is considered to be less risky than XHB based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	XLRE	XHB	Difference
Volatility (1M) Calculated over the trailing 1-month period	3.71%	8.43%	-4.72%
Volatility (6M) Calculated over the trailing 6-month period	9.66%	19.99%	-10.33%
Volatility (1Y) Calculated over the trailing 1-year period	13.43%	27.75%	-14.32%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	19.06%	27.64%	-8.58%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	20.40%	27.42%	-7.02%

XLRE vs. XHB - Expense Ratio Comparison

XLRE has a 0.13% expense ratio, which is lower than XHB's 0.35% expense ratio.

Dividends

XLRE vs. XHB - Dividend Comparison

XLRE's dividend yield for the trailing twelve months is around 3.22%, more than XHB's 0.62% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
XHB SPDR S&P Homebuilders ETF	0.62%	0.78%	0.59%	0.77%	1.06%	0.51%	0.73%	0.89%	1.25%	0.72%	0.67%	0.50%
XLRE Real Estate Select Sector SPDR Fund	3.22%	3.45%	3.43%	3.31%	3.70%	2.61%	3.15%	3.06%	3.78%	3.25%	4.22%	1.09%

Frequently Asked Questions

Can I hold both XLRE and XHB in my portfolio?

XLRE and XHB have a correlation of 0.55, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, XLRE or XHB?

XHB has higher volatility (8.43%) compared to XLRE (3.71%). In terms of maximum drawdown, XLRE dropped -38.83% vs XHB's -81.61%.

Which ETF is better, XLRE or XHB?

On 10-year performance, XHB leads with 12.71% vs 6.68% for XLRE. On fees, XLRE is cheaper at 0.13% per year. On volatility, XLRE has been the lower-risk option at 3.71%. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF has performed better, XLRE or XHB?

Over the 10-year period, XHB has performed better with a 12.71% return vs 6.68%. Past performance does not guarantee future results, so compare this with risk, fees, and fund exposure.

Which ETF is cheaper, XLRE or XHB?

XLRE is cheaper with a 0.13% expense ratio, compared with 0.35% for XHB.

Which ETF pays a higher dividend yield, XLRE or XHB?

XLRE has the higher dividend yield at 3.22%, compared with 0.62% for XHB.

What is the main difference between XLRE and XHB?

XLRE is categorized as REIT, while XHB is Building & Construction. XLRE tracks Real Estate Select Sector Index, while XHB tracks S&P Homebuilders Select Industry Index. Their fees differ too: 0.13% for XLRE and 0.35% for XHB.

Which has better risk-adjusted returns?

XLRE currently has the higher Sharpe Ratio (0.61 vs 0.38), 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.