The Energy Select Sector SPDR Fund (XLE) and the Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) are both among the Top 100 ETFs. XLE is a SPDR State Street Global Advisors Equity Energy fund and VOE is a Vanguard Mid-Cap Value fund. So, what’s the difference between XLE and VOE? And which fund is better?
The expense ratio of XLE is 0.05 percentage points higher than VOE’s (0.12% vs. 0.07%). XLE also has a higher exposure to the energy sector and a higher standard deviation. Overall, XLE has provided lower returns than VOE over the past 11 years.
In this article, we’ll compare XLE vs. VOE. We’ll look at industry exposure and risk metrics, as well as at their portfolio growth and fund composition. Moreover, I’ll also discuss XLE’s and VOE’s performance, annual returns, and holdings and examine how these affect their overall returns.
|Name||Energy Select Sector SPDR Fund||Vanguard Mid-Cap Value Index Fund ETF Shares|
|Category||Equity Energy||Mid-Cap Value|
|Issuer||SPDR State Street Global Advisors||Vanguard|
The Energy Select Sector SPDR Fund (XLE) is a Equity Energy fund that is issued by SPDR State Street Global Advisors. It currently has 25.55B total assets under management and has yielded an average annual return of 1.28% over the past 10 years. The fund has a dividend yield of 3.92% with an expense ratio of 0.12%.
The Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) is a Mid-Cap Value fund that is issued by Vanguard. It currently has 26.78B total assets under management and has yielded an average annual return of 12.52% over the past 10 years. The fund has a dividend yield of 1.87% with an expense ratio of 0.07%.
XLE’s dividend yield is 2.05% higher than that of VOE (3.92% vs. 1.87%). Also, XLE yielded on average 11.24% less per year over the past decade (1.28% vs. 12.52%). The expense ratio of XLE is 0.05 percentage points higher than VOE’s (0.12% vs. 0.07%).
The Energy Select Sector SPDR Fund (XLE) has the most exposure to the Energy sector at 100.0%. This is followed by Technology and Industrials at 0.0% and 0.0% respectively. Consumer Cyclical (0.0%), Financial Services (0.0%), and Real Estate (0.0%) only make up 0.00% of the fund’s total assets.
XLE’s mid-section with moderate exposure is comprised of Consumer Defensive, Healthcare, Utilities, Communication Services, and Industrials stocks at 0.0%, 0.0%, 0.0%, 0.0%, and 0.0%.
The Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) has the most exposure to the Financial Services sector at 18.26%. This is followed by Consumer Cyclical and Real Estate at 11.8% and 11.48% respectively. Communication Services (5.27%), Basic Materials (5.44%), and Energy (5.69%) only make up 16.40% of the fund’s total assets.
VOE’s mid-section with moderate exposure is comprised of Healthcare, Industrials, Technology, Utilities, and Real Estate stocks at 7.04%, 9.4%, 9.85%, 10.93%, and 11.48%.
XLE is 94.31% more exposed to the Energy sector than VOE (100.0% vs 5.69%). XLE’s exposure to Technology and Industrials stocks is 9.85% lower and 9.40% lower respectively (0.0% vs. 9.85% and 0.0% vs. 9.4%). In total, Consumer Cyclical, Financial Services, and Real Estate also make up 41.54% less of the fund’s holdings compared to VOE (0.00% vs. 41.54%).
|Exxon Mobil Corp||23.7%|
|EOG Resources Inc||4.46%|
|Marathon Petroleum Corp||4.17%|
|Pioneer Natural Resources Co||4.08%|
|Kinder Morgan Inc Class P||3.85%|
|Williams Companies Inc||3.5%|
XLE’s Top Holdings are Exxon Mobil Corp, Chevron Corp, ConocoPhillips, EOG Resources Inc, and Schlumberger Ltd at 23.7%, 20.03%, 4.64%, 4.46%, and 4.43%.
Marathon Petroleum Corp (4.17%), Pioneer Natural Resources Co (4.08%), and Phillips 66 (4.07%) have a slightly smaller but still significant weight. Kinder Morgan Inc Class P and Williams Companies Inc are also represented in the XLE’s holdings at 3.85% and 3.5%.
|Carrier Global Corp Ordinary Shares||1.28%|
|International Flavors & Fragrances Inc||1.13%|
|Motorola Solutions Inc||1.12%|
|Discover Financial Services||1.09%|
|Valero Energy Corp||0.97%|
|Willis Towers Watson PLC||0.9%|
|D.R. Horton Inc||0.89%|
VOE’s Top Holdings are Carrier Global Corp Ordinary Shares, International Flavors & Fragrances Inc, Motorola Solutions Inc, Discover Financial Services, and Welltower Inc at 1.28%, 1.13%, 1.12%, 1.09%, and 1.05%.
Corteva Inc (0.99%), Valero Energy Corp (0.97%), and Corning Inc (0.95%) have a slightly smaller but still significant weight. Willis Towers Watson PLC and D.R. Horton Inc are also represented in the VOE’s holdings at 0.9% and 0.89%.
The Energy Select Sector SPDR Fund (XLE) has a Sharpe Ratio of 0.12 with a Treynor Ratio of -0.4 and a Alpha of -11.98. Its Standard Deviation is 27.52 while XLE’s R-squared is 61.84. Furthermore, the fund has a Mean Return of 0.32 and a Beta of 1.54.
The Vanguard Mid-Cap Value Index Fund ETF Shares (VOE) has a Standard Deviation of 15.98 with a Sharpe Ratio of 0.75 and a Mean Return of 1.05. Its Beta is 1.11 while VOE’s Treynor Ratio is 10.19. Furthermore, the fund has a Alpha of -3.77 and a R-squared of 88.76.
XLE’s Mean Return is 0.73 points lower than that of VOE and its R-squared is 26.92 points lower. With a Standard Deviation of 27.52, XLE is slightly more volatile than VOE. The Alpha and Beta of XLE are 8.21 points lower and 0.43 points higher than VOE’s Alpha and Beta.
XLE had its best year in 2016 with an annual return of 27.95%. XLE’s worst year over the past decade yielded -32.56% and occurred in 2020. In most years the Energy Select Sector SPDR Fund provided moderate returns such as in 2017, 2011, and 2012 where annual returns amounted to -1.01%, 2.98%, and 5.17% respectively.
The year 2013 was the strongest year for VOE, returning 37.65% on an annual basis. The poorest year for VOE in the last ten years was 2018, with a yield of -12.41%. Most years the Vanguard Mid-Cap Value Index Fund ETF Shares has given investors modest returns, such as in 2014, 2016, and 2012, when gains were 13.98%, 15.26%, and 16.04% respectively.
|Fund||Initial Balance||Final Balance||CAGR|
A $10,000 investment in XLE would have resulted in a final balance of $9,339. This is a profit of $-661 over 11 years and amounts to a compound annual growth rate (CAGR) of 1.28%.
With a $10,000 investment in VOE, the end total would have been $33,655. This equates to a $23,655 profit over 11 years and a compound annual growth rate (CAGR) of 12.52%.
XLE’s CAGR is 11.24 percentage points lower than that of VOE and as a result, would have yielded $24,316 less on a $10,000 investment. Thus, XLE performed worse than VOE by 11.24% annually.
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