ETF Comparison

VDE vs XLE: Which Is the Better Pick in 2026?

A head-to-head comparison of Vanguard Energy ETF and State Street Energy Select Sector SPDR ETF covering yield, cost, risk, and income potential.

Updated October 16, 2026

How these figures are calculated: methodology.

Best for

VDEInvestors who want broad equity exposure.
XLEInvestors who want broad equity exposure.

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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.

VDE has lagged XLE over the trailing twelve months, posting a 61.94% total return against 64.60%. The lead holds up over 10 years too: XLE has compounded at 11.36% a year, against 10.80% for VDE. 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.
Symbol	YTD cumulative	1Y cumulative	3Y annualized	5Y annualized	10Y annualized	Since Sep 2004	Volatility	Sharpe	Sortino	Max drawdown
VDE	53.82%	61.94%	18.08%	22.66%	10.80%	8.94%	21.9%	0.57	0.77	-21.4%
XLE	55.65%	64.60%	18.48%	23.19%	11.36%	9.44%	21.9%	0.59	0.79	-20.1%

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 Sep 2004” measures every fund from September 29, 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.
Metric	VDE	XLE
Full name	Vanguard Energy ETF	State Street Energy Select Sector SPDR ETF
Issuer	Vanguard	State Street
Underlying index	MSCI US Investable Market Energy 25/50 Index	Energy Select Sector Index
Last Close	$190.14 as of October 16, 2026	$68.24 as of October 16, 2026
Distribution rate	2.21%	2.23%
Trailing 12-month yield	2.15%	2.23%
Distribution Safety Score™	91	91
Safety-Adjusted Yield	2.01%	2.03%
Expense ratio	0.09%	0.08%
AUM	$11.5B	$44.8B
Distribution frequency	Quarterly	Quarterly
Objective	Tracks the MSCI US Investable Market Energy 25/50 Index.	Provide exposure to the fund's underlying index or strategy per issuer materials.
Asset class	Equity	Equity
Inception date	09/23/2004	12/16/1998
Beta	-0.01	-0.03
Last dividend	$1.0519	$0.38028
Ex-dividend date	09/23/2026	09/21/2026

Bottom lineVDE and XLE 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.

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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 VDE.

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 XLE.

See all ETFs from State Street

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Quick verdict

VDE (Vanguard Energy ETF) and XLE (State Street Energy Select Sector SPDR ETF) are both quarterly-pay dividend ETFs, but they take different approaches.

XLE offers the higher yield at 2.23% vs 2.21% for VDE. A higher yield means more current income per dollar invested, though it may come with different risk characteristics.

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

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

XLE is the larger fund by assets ($44.8B), but assets alone do not establish trading costs or liquidity.

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Deep dive

Yield & income

On a $10,000 investment, VDE would generate roughly $55.25 cash per distribution, while XLE would produce $55.75 cash per distribution, at current distribution rates. Both pay quarterly distributions.

VDE yield2.21%

XLE yield2.23%

Cash diff on $10K$0.50

Cost & efficiency

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

VDE ER0.09%

XLE ER0.08%

Strategy & risk

VDE tracks MSCI US Investable Market Energy 25/50 Index, while XLE tracks Energy Select Sector Index with an oil approach.

VDE beta-0.01

XLE beta-0.03

Fund details

VDE is managed by Vanguard (launched 09/23/2004) with $11.5B in assets. XLE is managed by State Street (launched 12/16/1998) with $44.8B in assets.

VDE AUM$11.5B

XLE AUM$44.8B

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Frequently asked questions

What is the current distribution rate for VDE and XLE?

VDE currently distributes 2.21% and XLE 2.23%, 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 VDE or XLE better for dividend income?

It depends on your goals. XLE 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 VDE and XLE?

VDE (Vanguard Energy ETF) tracks MSCI US Investable Market Energy 25/50 Index, while XLE (State Street Energy Select Sector SPDR ETF) tracks Energy Select Sector Index with an oil approach. They are issued by Vanguard and State Street respectively.

Can I hold both VDE and XLE?

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 VDE or XLE 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: VDE scores 91, XLE scores 91. 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, VDE or XLE?

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

How much income does $10,000 in VDE vs XLE generate?

At current rates, $10,000 in VDE would generate roughly $55.25 cash per distribution ($221.00 annually). The same in XLE would produce about $55.75 cash per distribution ($223.00 annually).

Which has performed better historically, VDE or XLE?

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Dividend dates and history

VDE vs XLE — at a glance

Generated October 17, 2026.

Overview

VDE and XLE are both energy-sector equity ETFs tracking broad US energy exposure, but they use different underlying indexes and fund families. The funds are functionally similar—both holding oil, gas, and related infrastructure stocks—but differ slightly in index construction, fund size, and cost.

How they differ

The biggest structural difference is their underlying indexes. This means XLE's holdings may skew toward larger, more established energy names, while VDE's capping rules may allow broader exposure. The expense ratios are nearly identical—0.09% for VDE versus 0.08% for XLE—a difference of just 0.01%. Dividend yields are also similar: 2.21% for VDE and 2.23% for XLE, both paid quarterly.

XLE is the older fund, launched in 12/16/1998, compared to VDE's 09/23/2004 inception. Both report near-zero or slightly negative betas, suggesting minimal systematic market correlation relative to broad indexes—a quirk that reflects energy's historically low correlation to equities overall, though beta moves over time with sector sentiment.

Who each is best for

VDE: Fits investors who want exposure to a broader energy market definition that includes smaller-cap and mid-cap energy names, and who prefer Vanguard's fund ecosystem and structure.

Key risks to know

Index concentration: Both funds hold commodity-exposed stocks whose prices move with oil and gas prices. Energy is a cyclical sector; sharp declines in crude or natural gas prices compress margins and multiples across holdings. Neither fund hedges or dampens that exposure.

Overlapping holdings: The two indexes may hold similar large-cap energy names (majors like ExxonMobil, Chevron, ConocoPhillips). If you hold both, you're not achieving sector diversification; you're doubling down on similar businesses.

Regulatory and energy-transition risk: Renewable energy policies, carbon regulations, and investor capital reallocation toward clean energy may constrain long-term returns for fossil-fuel-heavy energy portfolios. This applies to both funds.

Distribution sustainability: Both funds' 2%+ distribution rates depend on energy sector profitability. In a downturn or low-price environment, distributions may be cut or rely on return of capital, eroding NAV. Both charge negligible fees and distribute similar yields. The choice hinges mainly on your preference for index construction (broad MSCI capped versus S&P 500 select) and fund size tolerance. Past performance in energy does not predict future returns as the sector evolves.

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

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These comparisons follow the Dividend Vision methodology.