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ETF Comparison

VPU vs XLU: Which Is the Better Pick in 2026?

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

Updated October 12, 2026

How these figures are calculated: methodology.

Best for

  • VPUInvestors who want broad equity exposure.
  • XLUInvestors 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.

VPU has lagged XLU over the trailing twelve months, posting a -5.28% total return against -5.06%. The lead holds up over 10 years too: XLU has compounded at 9.18% a year, against 9.02% for VPU. 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
VPU-0.66%-5.28%15.83%8.32%9.02%9.35%15.8%0.650.92-15.6%
XLU-0.45%-5.06%15.79%8.51%9.18%9.36%16.1%0.640.90-16.0%

Total return with all distributions reinvested on the ex-dividend date (a modeling convention, not the cash-settlement date), split-adjusted, as of October 12, 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.
MetricVPUXLU
Full nameVanguard Utilities ETFState Street Utilities Select Sector SPDR ETF
IssuerVanguardState Street
Underlying indexMSCI US Investable Market Utilities 25/50 IndexUtilities Select Sector Index
Last Close$180.12 as of October 12, 2026$41.63 as of October 12, 2026
Distribution rate2.79%2.97%
Trailing 12-month yield2.89%2.91%
Distribution Safety Score™ 9797
Safety-Adjusted Yield 2.71%2.88%
Expense ratio0.09%0.08%
AUM$8.01B$24.1B
Distribution frequencyQuarterlyQuarterly
ObjectiveTracks the MSCI US Investable Market Utilities 25/50 Index.Seeks to provide investment results that correspond generally to the price and yield performance of the Utilities Select Sector Index.
Asset classEquityEquity
Inception date01/26/200412/16/1998
Beta0.420.4
Last dividend$1.258$0.30
Ex-dividend date09/23/202609/21/2026

Bottom lineVPU and XLU 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$4.70T

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 VPU.

See all ETFs from Vanguard
State Street
ETFs179
Total AUM$2.16T

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 XLU.

See all ETFs from State Street

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Quick verdict

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

XLU offers the higher yield at 2.97% vs 2.79% for VPU. A higher yield means more current income per dollar invested, though it may come with different risk characteristics.

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

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

XLU is the larger fund by assets ($24.1B), but assets alone do not establish trading costs or liquidity.

Deep dive

Yield & income

On a $10,000 investment, VPU would generate roughly $69.75 cash per distribution, while XLU would produce $74.25 cash per distribution, at current distribution rates. Both pay quarterly distributions.

VPU yield2.79%
XLU yield2.97%
Cash diff on $10K$4.50

Cost & efficiency

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

VPU ER0.09%
XLU ER0.08%

Strategy & risk

VPU tracks MSCI US Investable Market Utilities 25/50 Index, while XLU tracks Utilities Select Sector Index with an utilities approach. Beta is 0.42 for VPU and 0.4 for XLU — effectively similar market sensitivity.

VPU beta0.42
XLU beta0.4

Fund details

VPU is managed by Vanguard (launched 01/26/2004) with $8.01B in assets. XLU is managed by State Street (launched 12/16/1998) with $24.1B in assets.

VPU AUM$8.01B
XLU AUM$24.1B
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Frequently asked questions

What is the current distribution rate for VPU and XLU?

VPU currently distributes 2.79% and XLU 2.97%, 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 VPU or XLU better for dividend income?

It depends on your goals. XLU 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 VPU and XLU?

VPU (Vanguard Utilities ETF) tracks MSCI US Investable Market Utilities 25/50 Index, while XLU (State Street Utilities Select Sector SPDR ETF) tracks Utilities Select Sector Index with an utilities approach. They are issued by Vanguard and State Street respectively.

Can I hold both VPU and XLU?

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 VPU or XLU 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: VPU scores 97, XLU scores 97. 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, VPU or XLU?

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

How much income does $10,000 in VPU vs XLU generate?

At current rates, $10,000 in VPU would generate roughly $69.75 cash per distribution ($279.00 annually). The same in XLU would produce about $74.25 cash per distribution ($297.00 annually).

Which has performed better historically, VPU or XLU?

VPU has lagged XLU over the trailing twelve months, posting a -5.28% total return against -5.06%. The lead holds up over 10 years too: XLU has compounded at 9.18% a year, against 9.02% for VPU. Figures are total returns: price change plus every distribution reinvested. Past performance does not guarantee future results.

More comparisons to explore

VPU vs XLU — at a glance

Generated October 10, 2026.

Overview

VPU and XLU are both utilities-focused ETFs tracking broad U.S. utility sector indexes, but they differ in scope and size. XLU is significantly larger, with $24.1B in assets versus $8.01B for VPU, and has been operating since 12/16/1998 compared to VPU's 01/26/2004.

How they differ

The biggest structural difference is index composition: XLU holds only the utility stocks in the S&P 500, while VPU casts a wider net to include utilities across the broader investable market, including smaller-cap names. That breadth typically means VPU holds more names and captures a slightly different segment of the sector.

On yield, XLU leads at 2.97% versus 2.79%, a difference of 0.18%. Both pay quarterly dividends. XLU is also fractionally cheaper to own: its expense ratio of 0.08% beats VPU's 0.09% by 0.01%. The asset bases reflect the market's preference for XLU's larger, more liquid fund.

On risk, both have similar defensive betas—VPU's 0.42 and XLU's 0.4—signaling lower volatility relative to the broader market, which is typical of utilities. The main risk difference is concentration: XLU's S&P 500 constraint means it captures only the largest, most established utility names, while VPU's broader universe may introduce exposure to smaller operators.

Who each is best for

VPU: Fits investors seeking broader utility sector exposure beyond the S&P 500's largest names and willing to pay slightly higher fees for access to a more comprehensive market-cap-weighted universe.

XLU: Fits investors who want the core utilities holdings of the S&P 500 at a lower cost and with a higher current distribution, favoring simplicity and liquidity over sector breadth.

Key risks to know

  • Index concentration: XLU's constraint to S&P 500 utilities means exposure to a smaller set of mega-cap and large-cap names; VPU's broader investable-market approach captures smaller utilities but introduces more name-level and operational idiosyncratic risk.
  • Sector cyclicality and rate sensitivity: Both funds are sensitive to interest-rate movements, since utility valuations are often anchored to bond yields. Rising rates can pressure share prices even if dividend growth holds steady.
  • Regulatory and operational risk: Utilities operate under state and federal regulation, subject to rate-setting, environmental compliance, and capital-spending mandates that can affect earnings and dividend coverage.
  • Dividend yield sustainability: Neither fund's current yield should be assumed to grow in line with historical averages; both depend on stable or modest earnings growth and regulators' willingness to allow rate increases to support payouts.

Bottom line

If you prioritize access to the broadest utility universe and accept slightly higher fees, VPU offers that breadth; if you want the largest, most liquid S&P 500 utility names with a marginally higher yield and lower cost, XLU is the more straightforward choice. Both have low volatility and moderate income. Past performance does not predict future results.

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

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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

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These comparisons follow the Dividend Vision methodology.