XLU alternatives and similar ETFs

XLU alternatives at a glance#

Each fund below can stand in for XLU, 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 XLU and its alternatives did over the same dates#

Each row measures the alternative and XLU 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 XLU alternative, compared#

VPU: Vanguard Utilities ETF#

VPU also holds US electric, gas and water companies. It tracks the MSCI US Investable Market Utilities 25/50 Index, while XLU tracks the Utilities Select Sector Index.

It charges 0.09% a year, about $9 on $10,000, against $8 for XLU. It held 68 stocks, against 31 for XLU.

From January 2004 to October 2026, VPU returned about 9.4% a year and XLU returned about 9.4% a year. Over about the last five years they moved almost exactly together (correlation 1.00).

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

SCHH: Schwab U.S. REIT ETF#

SCHH is a looser match. It holds US real estate investment trusts (REITs), companies that own and rent out property, while XLU holds US electric, gas and water companies.

It charges 0.07% a year, about $7 on $10,000, against $8 for XLU. It held 117 stocks, against 31 for XLU.

From January 2011 to October 2026, SCHH returned about 6.6% a year and XLU returned about 10.1% a year. Over about the last five years they often moved together, but not always (correlation 0.66).

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

XLRE: State Street Real Estate Select Sector SPDR ETF#

XLRE is a looser match. It holds US real estate investment trusts (REITs), companies that own and rent out property, while XLU holds US electric, gas and water companies.

It charges 0.08% a year, about $8 on $10,000, against $8 for XLU. It held 30 stocks, against 31 for XLU.

From October 2015 to October 2026, XLRE returned about 6.7% a year and XLU returned about 9.5% a year. Over about the last five years they often moved together, but not always (correlation 0.66).

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

IYR: iShares U.S. Real Estate ETF#

IYR is a looser match. It holds US real estate investment trusts (REITs), companies that own and rent out property, while XLU holds US electric, gas and water companies.

It charges 0.37% a year, about $37 on $10,000, against $8 for XLU. It held 58 stocks, against 31 for XLU.

From June 2000 to October 2026, IYR returned about 8.1% a year and XLU returned about 7.8% a year. Over about the last five years they often moved together, but not always (correlation 0.66).

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

VNQ: Vanguard Real Estate ETF#

VNQ is a looser match. It holds US real estate investment trusts (REITs), companies that own and rent out property, while XLU holds US electric, gas and water companies.

It charges 0.13% a year, about $13 on $10,000, against $8 for XLU. It held 139 stocks, against 31 for XLU.

From September 2004 to October 2026, VNQ returned about 7.3% a year and XLU returned about 9.3% a year. Over about the last five years they often moved together, but not always (correlation 0.65).

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

XLP: State Street Consumer Staples Select Sector SPDR ETF#

XLP is a looser match. It holds US companies that sell things people buy in good times and bad, such as food and soap, while XLU holds US electric, gas and water companies.

It charges 0.08% a year, about $8 on $10,000, against $8 for XLU. It held 35 stocks, against 31 for XLU.

From December 1998 to October 2026, XLP returned about 6.9% a year and XLU returned about 7.4% a year. Over about the last five years they often moved in different ways (correlation 0.57).

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

VDC: Vanguard Consumer Staples ETF#

VDC is a looser match. It holds US companies that sell things people buy in good times and bad, such as food and soap, while XLU holds US electric, gas and water companies.

It charges 0.09% a year, about $9 on $10,000, against $8 for XLU. It held 103 stocks, against 31 for XLU.

From January 2004 to October 2026, VDC returned about 9.5% a year and XLU returned about 9.4% a year. Over about the last five years they often moved in different ways (correlation 0.57).

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

XLU versions from other fund companies#

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

• Vanguard: VPU, Vanguard Utilities ETF (same kind of fund, 0.09% a year)
• Schwab: SCHH, Schwab U.S. REIT ETF (related fund, 0.07% a year)
• iShares (BlackRock): IYR, iShares U.S. Real Estate ETF (related fund, 0.37% 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 XLU 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, XLU costs about $8 a year. SCHH costs about $7.
• 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 XLU 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 VPU, SCHH or XLRE, are less likely to.

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

Test XLU 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 XLU and VPU, 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 XLU. 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 XLU 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 XLU only on days both traded. Read what a backtest simulates for more on these measures.