DV
Dividend Vision

ETF Comparison

VCR vs XLY: Which Is the Better Pick in 2026?

A head-to-head comparison of Vanguard Consumer Discretionary ETF and Consumer Discretionary Select Sector SPDR Fund covering yield, cost, risk, and income potential.

Updated October 16, 2026

How these figures are calculated: methodology.

Best for

  • VCRInvestors who want broad equity exposure.
  • XLYInvestors who want broad equity exposure.

Jump to the side-by-side numbers

Visual comparison

Key metrics

Projected income on $10K

Projections assume the current yield and share price remain constant. Actual results will vary.

Total returns

100% reinvested · ex-date convention. Period returns use this fixed assumption, independent of chart settings. YTD and 1Y are cumulative period returns; 3Y, 5Y, and 10Y are annualized. The shared Since-start window is annualized only when it covers at least one year.

VCR has outpaced XLY over the trailing twelve months, posting a -1.36% total return against -2.43%. The lead holds up over 10 years too: VCR has compounded at 13.02% a year, against 12.18% for XLY. Figures are total returns: price change plus every distribution reinvested.

Total return and risk statistics by fund. Each row is one fund; each column is one period or statistic.
SymbolYTD cumulative1Y cumulative3Y annualized5Y annualized10Y annualizedSince Jan 2004Volatility Sharpe Sortino Max drawdown
VCR-4.02%-1.36%12.63%3.94%13.02%10.69%21.1%0.370.53-27.4%
XLY-5.23%-2.43%12.59%4.41%12.18%10.39%20.8%0.370.53-26.0%

Total return with all distributions reinvested on the ex-dividend date (a modeling convention, not the cash-settlement date), split-adjusted, as of October 16, 2026. YTD and 1Y are cumulative period returns; 3Y, 5Y, and 10Y are annualized. The shared Since-start window is annualized only when it covers at least one year. “Since Jan 2004” measures every fund from January 30, 2004 — the start of shared available history — so all funds share one comparison window. Volatility is the annualized standard deviation of daily total returns over the trailing 3 years. Sharpe and Sortino divide the annualized return in excess of the risk-free rate by, respectively, that volatility and the downside deviation (both over the trailing 3 years) — higher is better. Max drawdown is the largest peak-to-trough total-return decline over the same window — shallower is better.

Side-by-side snapshot

Side-by-side snapshot. Each row is one metric; each column is one fund.
MetricVCRXLY
Full nameVanguard Consumer Discretionary ETFConsumer Discretionary Select Sector SPDR Fund
IssuerVanguardState Street
Underlying indexMSCI US Investable Market Consumer Discretionary 25/50 IndexConsumer Discretionary Select Sector Index
Last Close$375.83 as of October 16, 2026$112.46 as of October 16, 2026
Distribution rate0.87%0.87%
Trailing 12-month yield0.80%0.83%
Distribution Safety Score™ 9294
Safety-Adjusted Yield 0.80%0.82%
Expense ratio0.09%0.08%
AUM$5.83B$22.1B
Distribution frequencyQuarterlyQuarterly
ObjectiveTracks the MSCI US Investable Market Consumer Discretionary 25/50 Index.Tracks the Consumer Discretionary Select Sector Index from the S&P 500.
Asset classEquityEquity
Inception date01/26/200412/16/1998
Beta1.251.18
Last dividend$0.816$0.244
Ex-dividend date09/23/202609/21/2026

Bottom lineVCR and XLY are both for investors who want broad equity exposure — so strategy isn't the deciding factor here. Fees and payouts are close too, so it comes down to which your broker offers commission-free and any share-price or tax-lot preference.

Model this comparison:
Compare in my portfolio Forecast income Save to watchlist

Income calculator

See how much monthly income a hypothetical investment would generate in each ETF at current yields.

Vanguard
ETFs116
Total AUM$4.66T

ETFs and AUM reflect what Dividend Vision tracks — the issuer's full lineup may be larger.

Vanguard is one of the largest and most established ETF issuers, known for low-cost, broadly diversified fund offerings built on passive indexing principles. Their lineup spans multiple asset classes and strategies, including core equity and bond index funds, dividend-focused portfolios, ESG-screened options, factor-based strategies, sector exposure, target-date retirement funds, and international investments across developed and emerging markets. The platform is characterized by its emphasis on accessibility and cost efficiency across a comprehensive range of fund families, serving both individual investors seeking broad market exposure and those pursuing specific income, sustainability, or thematic objectives.

See our curated list of related YouTube videos on VCR.

See all ETFs from Vanguard
State Street
ETFs186
Total AUM$2.15T

ETFs and AUM reflect what Dividend Vision tracks — the issuer's full lineup may be larger.

State Street Global Advisors (SSGA) is one of the largest ETF providers globally, known for its flagship SPDR suite of exchange-traded products that serve both institutional and retail investors across a broad range of asset classes. Their 88-fund lineup spans diverse strategies including sector exposure (Select Sector SPDR), income generation (Income and Select Sector SPDR Premium Income families), commodities (including the widely-held GLD gold ETF), bonds, ESG-focused investments, and thematic allocations, with popular tickers like DIA (Diamonds Trust), FEZ (Eurozone exposure), and JNK (high-yield bonds) among their most recognized funds. The issuer is characterized by its comprehensive coverage across multiple market segments and its emphasis on both traditional index-based products and specialized strategies like covered call income funds and factor-based investing.

See our curated list of related YouTube videos on XLY.

See all ETFs from State Street

Want to go deeper?

Add these ETFs to a sample portfolio and forecast your dividend income over 5+ years — free to start, no credit card.

Compare in my portfolio Forecast income Save to watchlist

Quick verdict

VCR (Vanguard Consumer Discretionary ETF) and XLY (Consumer Discretionary Select Sector SPDR Fund) are both quarterly-pay dividend ETFs, but they take different approaches.

XLY is cheaper with an expense ratio of 0.08% compared to 0.09%.

They have different reference exposures: VCR is linked to MSCI US Investable Market Consumer Discretionary 25/50 Index while XLY is linked to Consumer Discretionary Select Sector Index, which means their performance drivers differ.

XLY is the larger fund by assets ($22.1B), but assets alone do not establish trading costs or liquidity.

Deep dive

Yield & income

On a $10,000 investment, VCR would generate roughly $21.75 cash per distribution, while XLY would produce $21.75 cash per distribution, at current distribution rates. Both pay quarterly distributions.

VCR yield0.87%
XLY yield0.87%
Cash diff on $10K$0.00

Cost & efficiency

Over 10 years on $10,000, VCR would cost approximately $90 in fees vs $80 for XLY (simplified, not compounded). The $10.00 difference may be offset by yield or performance.

VCR ER0.09%
XLY ER0.08%

Strategy & risk

VCR tracks MSCI US Investable Market Consumer Discretionary 25/50 Index, while XLY tracks Consumer Discretionary Select Sector Index. Beta is 1.25 for VCR and 1.18 for XLY, making XLY the less volatile of the two by this measure.

VCR beta1.25
XLY beta1.18

Fund details

VCR is managed by Vanguard (launched 01/26/2004) with $5.83B in assets. XLY is managed by State Street (launched 12/16/1998) with $22.1B in assets.

VCR AUM$5.83B
XLY AUM$22.1B
Ready to act?
Open in Comparator Model in portfolio See pricing

Enjoyed this page?

Do us a favor — if you found this comparison useful, please share it with a friend researching dividend ETFs.

Frequently asked questions

What is the current distribution rate for VCR and XLY?

VCR currently distributes 0.87% and XLY 0.87%, based on fund data updated October 2026. Distribution rate moves with both the payout and the share price, so check the as-of date before relying on either figure.

Is VCR or XLY better for dividend income?

It depends on your goals. VCR currently offers the higher distribution yield, which means more income per dollar invested. However, a lower-yield fund may offer better total return or lower volatility. Consider your time horizon and risk tolerance.

What is the difference between VCR and XLY?

VCR (Vanguard Consumer Discretionary ETF) tracks MSCI US Investable Market Consumer Discretionary 25/50 Index, while XLY (Consumer Discretionary Select Sector SPDR Fund) tracks Consumer Discretionary Select Sector Index. They are issued by Vanguard and State Street respectively.

Can I hold both VCR and XLY?

Yes — nothing prevents holding both. Whether the combination actually diversifies depends on how much the underlying exposures overlap, which isn't fully measurable from the data on this page; review each security's holdings, sector, and strategy before treating them as complementary.

Is VCR or XLY safer?

By Dividend Vision's Distribution Safety Score — a rules-based 0–100 estimate of how resilient a distribution looks, where higher is safer — they are effectively tied: XLY scores 94, VCR scores 92. Neither has a clear safety edge on that measure. No score makes an investment risk-free — treat this as a screening signal, not a guarantee.

Which has lower fees, VCR or XLY?

VCR has an expense ratio of 0.09% while XLY charges 0.08%. Lower fees mean more of your investment returns stay in your pocket over time.

How much income does $10,000 in VCR vs XLY generate?

At current rates, $10,000 in VCR would generate roughly $21.75 cash per distribution ($87.00 annually). The same in XLY would produce about $21.75 cash per distribution ($87.00 annually).

Which has performed better historically, VCR or XLY?

VCR has outpaced XLY over the trailing twelve months, posting a -1.36% total return against -2.43%. The lead holds up over 10 years too: VCR has compounded at 13.02% a year, against 12.18% for XLY. Figures are total returns: price change plus every distribution reinvested. Past performance does not guarantee future results.

More comparisons to explore

VCR vs XLY — at a glance

Generated October 17, 2026.

Overview

VCR and XLY are both ETFs tracking US consumer discretionary stocks, but they differ in their underlying index and universe. This structural difference creates meaningful distinctions in diversification breadth and company size exposure.

How they differ

The core difference is breadth: XLY holds only S&P 500 consumer discretionary stocks, while VCR includes companies across the full market-cap spectrum. That means VCR has exposure to mid-cap and small-cap discretionary names that XLY excludes entirely. The expense ratios are nearly identical—0.08% for XLY and 0.09% for VCR—and both distribute 0.87% quarterly. VCR carries a slightly higher beta of 1.25 compared to XLY's 1.18, reflecting the amplified volatility that often comes with broader market-cap inclusion.

Who each is best for

VCR: Fits investors seeking broader exposure to consumer discretionary companies across all sizes, including mid-cap and small-cap holdings that can offer higher growth potential but with correspondingly higher volatility.

XLY: Designed for investors who prefer exposure limited to large-cap consumer discretionary stocks within the S&P 500, trading breadth for the stability and liquidity profile of mega-cap and large-cap names.

Key risks to know

  • Market-cap concentration in XLY. Because XLY is limited to S&P 500 constituents, it excludes the mid-cap and small-cap consumer discretionary universe that VCR captures, potentially missing growth or value opportunities outside the large-cap segment.
  • Higher volatility in VCR. The 1.25 beta indicates VCR amplifies broad market moves more than XLY's 1.18, meaning discretionary downturns hit harder and recoveries move faster—a headwind for risk-averse investors.
  • Cyclical sector risk. Both funds concentrate in consumer discretionary, a sector highly sensitive to economic slowdowns, credit availability, and consumer confidence. Recessions typically pressure these holdings materially.
  • Similar underlying exposure overlap. The largest consumer discretionary companies appear in both indexes, so holdings likely overlap substantially; investors should verify the exact composition to confirm differentiation matters for their portfolio.

Bottom line

If you want exposure to consumer discretionary across all market capitalizations and can tolerate higher volatility, VCR's broader universe and mid-cap/small-cap tilt may appeal. If you prefer to stay within the S&P 500's large-cap frame, XLY offers similar costs and yield with lower beta. Both are low-cost ways to track the sector, so the choice hinges on whether you need the full breadth VCR provides or the large-cap focus XLY imposes. Past performance doesn't predict future results.

AI-generated analysis for educational purposes only. Verify important details independently; past performance does not guarantee future results.

Learn the method

The metrics behind this comparison, explained in the Academy.

How to read a fund's stats How expense ratios eat returns Correlation between two funds

Still deciding? Compare them against your own portfolio

See how each ETF fits alongside your real holdings — forecast future income, analyze overlap, and gauge risk. Start a free 7-day Dividend Vision trial and make the call with your full portfolio in view.

Start Free Open in Comparator Browse Screener

These comparisons follow the Dividend Vision methodology.