XLB alternatives and similar ETFs

XLB alternatives at a glance#

Each fund below can stand in for XLB, closest first. “Same kind” funds hold the same kind of stocks through a different index. “Related” funds make a different bet that often moves the same way.

Fees come from each fund company, checked on the dates shown on each fund’s page.

How XLB and its alternatives did over the same dates#

Each row measures the alternative and XLB on the days both traded, so neither gets a head start. Correlation shows how closely their daily moves matched over about the last five years. A value of 1 means they always moved together.

Prices through October 16, 2026. Figures use daily closing prices adjusted for splits, with dividends reinvested. They do not include taxes or the cost of buying and selling. Past results do not tell you what will happen next.

Each XLB alternative, compared#

VAW: Vanguard Materials ETF#

VAW also holds US makers of chemicals, metals, paper and packaging. It tracks the MSCI US Investable Market Materials 25/50 Index, while XLB tracks the Materials Select Sector Index.

It charges 0.09% a year, about $9 on $10,000, against $8 for XLB. It held 110 stocks, against 24 for XLB.

From January 2004 to October 2026, VAW returned about 8.9% a year and XLB returned about 8.6% a year. Over about the last five years they moved almost exactly together (correlation 0.99).

Read the VAW fund page for its returns by year and worst drop.

XLI: State Street Industrial Select Sector SPDR ETF#

XLI is a looser match. It holds US makers of machines and airplanes, railroads and other industrial companies, while XLB holds US makers of chemicals, metals, paper and packaging.

It charges 0.08% a year, about $8 on $10,000, against $8 for XLB. It held 83 stocks, against 24 for XLB.

From December 1998 to October 2026, XLI returned about 9.2% a year and XLB returned about 8.2% a year. Over about the last five years they often moved together, but not always (correlation 0.82).

Read the XLI fund page for its returns by year and worst drop.

VIS: Vanguard Industrials ETF#

VIS is a looser match. It holds US makers of machines and airplanes, railroads and other industrial companies, while XLB holds US makers of chemicals, metals, paper and packaging.

It charges 0.09% a year, about $9 on $10,000, against $8 for XLB. It held 396 stocks, against 24 for XLB.

From September 2004 to October 2026, VIS returned about 10.5% a year and XLB returned about 8.5% a year. Over about the last five years they often moved together, but not always (correlation 0.82).

Read the VIS fund page for its returns by year and worst drop.

VDE: Vanguard Energy ETF#

VDE is a looser match. It holds US oil, gas and other energy companies, while XLB holds US makers of chemicals, metals, paper and packaging.

It charges 0.09% a year, about $9 on $10,000, against $8 for XLB. It held 111 stocks, against 24 for XLB.

From September 2004 to October 2026, VDE returned about 8.8% a year and XLB returned about 8.5% a year. Over about the last five years they often moved in different ways (correlation 0.46).

Read the VDE fund page for its returns by year and worst drop.

XLE: State Street Energy Select Sector SPDR ETF#

XLE is a looser match. It holds US oil, gas and other energy companies, while XLB holds US makers of chemicals, metals, paper and packaging.

It charges 0.08% a year, about $8 on $10,000, against $8 for XLB. It held 21 stocks, against 24 for XLB.

From December 1998 to October 2026, XLE returned about 9.4% a year and XLB returned about 8.2% a year. Over about the last five years they often moved in different ways (correlation 0.45).

Read the XLE fund page for its returns by year and worst drop.

XLB versions from other fund companies#

Some people keep all their funds with one company. Here is the closest fund to XLB from each other company on this page:

• Vanguard: VAW, Vanguard Materials ETF (same kind of fund, 0.09% a year)

Most brokers let you buy any ETF, whoever runs it. Mutual fund versions, such as a fund company’s index mutual fund, are not listed here.

How to choose between XLB and its alternatives#

• What it tracks. A fund on the same index holds the same stocks. A different index can mean different weights, more or fewer holdings, or a different mix.
• The fee. The difference is often small. On $10,000, XLB costs about $8 a year.
• History. An older fund has been through more bad markets, so you can see how far it fell.
• What you already own. Two funds that move together add little variety. A fund with a low correlation behaves more on its own.

Swapping XLB to harvest a tax loss#

Some investors sell a fund at a loss to lower their taxes, then buy a similar fund so they stay invested. This is called tax-loss harvesting.

The IRS wash sale rule blocks the loss if you buy a “substantially identical” security within 30 days before or after the sale. The IRS has not said exactly when two funds count. Funds on the same index are more likely to. Funds on a different index, such as VAW, XLI or VIS, are less likely to.

Ask a tax professional before you rely on this. Read the IRS rules in Publication 550.

Test XLB and its alternatives in a backtest#

Tactfolio is a platform where you build rules-based investing strategies, backtest them on decades of real prices, share them, and run them automatically in your own Alpaca account. Open the builder, add XLB and VAW, and see how each would have done on the same dates, or how a mix of both would have done.

The details#

Alternatives are picked from facts, not from returns. First come funds that track the same index as XLB. Then come funds that hold the same kind of stocks through another index. Last come funds from a close category that make a different bet. Leveraged funds are only listed as alternatives to other leveraged funds.

Within each group, the funds whose daily returns moved most like XLB over about the last five years come first. Returns and worst drops use Tactfolio’s stored daily prices, adjusted for splits, with dividends reinvested. Each alternative is measured with XLB only on days both traded. Read what a backtest simulates for more on these measures.