VDE vs XLE: fees, holdings and returns
VDE holds about 110 US energy companies of every size. XLE holds the energy companies in the S&P 500, about 20. Both are led by the same oil giants and move closely with oil and gas prices. Over the same dates since September 2004, VDE returned about 8.8% a year and XLE returned about 9.4% a year.
Written by the Tactfolio research team. Fund facts checked October 17, 2026. Prices through October 20, 2026.
Key points
- XLE costs less: 0.08% a year against 0.09%.
- VDE started trading in September 2004. XLE started in December 1998.
- Worst drops since 2004: VDE −74.7%, XLE −71.3%.
- Daily correlation: 0.99 (1 means they always move together).
What is the difference between VDE and XLE?#
XLE draws only from the S&P 500, so it holds just the largest energy companies, and two giants make up a large part of it. VDE adds mid-size and small producers, drillers and service firms. Smaller energy companies can swing more, so VDE has sometimes risen or fallen further. Their fees are close.
| Fact | VDE | XLE |
|---|---|---|
| Full name | Vanguard Energy ETF | State Street Energy Select Sector SPDR ETF |
| Issuer | Vanguard | SPDR (State Street) |
| Expense ratio | 0.09% a year | 0.08% a year |
| Started trading | September 23, 2004 | December 16, 1998 |
| Tracks | MSCI US Investable Market Energy 25/50 Index | Energy Select Sector Index |
| Holdings | 111 holdings as of September 30, 2026 | 21 holdings as of October 15, 2026 |
| Type | US stocks, ETF | US stocks, ETF |
Fund facts checked on the Vanguard VDE page and the SPDR (State Street) XLE page.
Is VDE or XLE cheaper?#
XLE costs less: 0.08% a year against 0.09%. On $10,000, that is about $9 a year for VDE and $8 for XLE. The fund takes its fee out of its own value a little each day, so you never get a bill.
VDE vs XLE performance over the same dates#
Both funds are measured from September 2004 to October 2026, the dates both traded. VDE returned about 8.8% a year and XLE returned about 9.4% a year. XLE came out ahead over this period, which does not mean it will again.
| Measure | VDE | XLE |
|---|---|---|
| $10,000 grew to | $64,246 | $72,737 |
| Total return | 542.5% | 627.4% |
| Return per year (CAGR) | 8.8% | 9.4% |
| Worst drop from a high | −74.7% | −71.3% |
| Volatility (how much it swings) | 29.6% | 29.6% |
| Last 12 months | 58.4% | 60.9% |
| Last 3 years, per year | 17.9% | 18.3% |
| Last 5 years, per year | 22.0% | 22.6% |
| Last 10 years, per year | 10.6% | 11.2% |
Prices through October 20, 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.
VDE and XLE returns by year#
| Year | VDE | XLE |
|---|---|---|
| 2026 (part of the year) | 53.0% | 55.0% |
| 2025 | 7.1% | 7.9% |
| 2024 | 6.8% | 5.6% |
| 2023 | 0.0% | −0.6% |
| 2022 | 62.9% | 64.3% |
| 2021 | 56.3% | 53.3% |
| 2020 | −33.0% | −32.7% |
| 2019 | 9.3% | 11.7% |
| 2018 | −20.0% | −18.2% |
| 2017 | −2.5% | −0.9% |
| 2016 | 29.2% | 28.0% |
| 2015 | −23.2% | −21.5% |
| 2014 | −11.7% | −8.7% |
| 2013 | 25.8% | 26.3% |
| 2012 | 3.4% | 5.2% |
| 2011 | 2.8% | 2.8% |
| 2010 | 21.1% | 21.8% |
| 2009 | 25.5% | 21.8% |
| 2008 | −39.6% | −39.0% |
| 2007 | 34.6% | 36.9% |
| 2006 | 19.0% | 18.1% |
| 2005 | 39.1% | 40.2% |
| 2004 (part of the year) | 5.3% | 5.0% |
Which fell further in bad times?#
A drawdown is how far a fund falls from its last high point. VDE’s worst fall was −74.7%, from June 23, 2014 to March 18, 2020. It got back to that high on April 18, 2022.
XLE’s worst fall was −71.3%, from June 23, 2014 to March 18, 2020. It got back to that high on March 4, 2022.
Their daily moves had a correlation of 0.99. A correlation of 1 means two funds always move up and down together. Near 0 means they move on their own. So holding both adds little variety.
Why people choose VDE or XLE#
VDE. People who want energy companies of every size tend to pick VDE.
XLE. People who want the largest US energy companies, or trade often, tend to pick XLE.
Strategies that hold VDE or XLE#
These classic strategies hold one or both at least some of the time. Each is a set of written rules you can open, test and copy.
- Faber sector rotation (the three strongest US sectors), by Mebane Faber, 2010 (holds XLE)
- Inflation Compass (Varadi’s growth and inflation model), by David Varadi, 2026 (holds XLE)
Other funds like VDE and XLE#
Each fund has more funds that hold the same kind of investments, ranked by how closely they move with it: VDE alternatives and XLE alternatives.
Test a mix of VDE and XLE#
Open the builder, add VDE and XLE, and give each a weight, such as 50% and 50%. The backtest shows how the mix would have done, with its worst drop, on daily prices. You can also add a rule, for example to switch between them, and compare. Read the full pages for VDE and XLE, or see more ETF comparisons.
The details#
Both funds use Tactfolio’s stored daily prices, adjusted for splits, with dividends reinvested. They are compared only on days both traded, starting the later fund’s first day, so neither gets a head start. Correlation uses daily returns over the same days. Read what a backtest simulates for more on these measures.
Common questions#
Do VDE and XLE hold the same stocks?#
Their largest holdings are the same oil companies. VDE also holds about 90 smaller energy companies that are not in the S&P 500.
Why do energy funds move with oil prices?#
Most of the companies in them find, pump, refine or move oil and gas, so their profits rise and fall with those prices.
Which is cheaper, VDE or XLE?#
XLE costs less: 0.08% a year against 0.09%. Fees come from each issuer and were checked on October 17, 2026.
Which did better, VDE or XLE?#
From September 2004 to October 2026, VDE returned about 8.8% a year and XLE returned about 9.4% a year, with dividends reinvested. Their worst drops were −74.7% and −71.3%. Past returns do not tell you what comes next.