XLE vs VDE: The Two Best Energy ETFs, Nearly Identical at the Top
XLE and VDE are both dominated by ExxonMobil and Chevron. The real difference is that VDE adds mid and small-cap energy companies for broader sector coverage. Both are cheap.
XLE (Energy Select Sector SPDR) and VDE (Vanguard Energy ETF) are the two leading US energy ETFs. XLE holds 23 S&P 500 energy companies. ExxonMobil and Chevron alone make up 40%+ of the fund. VDE tracks the MSCI US Investable Market Energy 25/50 Index with ~115 companies, adding midstream, refining, and smaller E&P companies not in the S&P 500. Both charge essentially the same fee: XLE 0.09%, VDE 0.10%. Top holdings and performance are nearly identical since XLE's mega-caps dominate both funds. VDE's broader diversification adds some exposure to small-cap energy companies that can outperform in commodity bull markets. XLE's higher trading volume makes it better for options strategies. For long-term energy sector exposure, either works. VDE has a slight breadth advantage.
Whether the lower-cost fund suits your situation depends on your existing holdings, account type, tax situation, and how you use each fund. This is a cost comparison, not a personalized recommendation.
Both funds trade commission-free at every major brokerage. Where to buy them →
📋 XLE vs VDE: Key Facts Side by Side
| Metric | XLE | VDE |
|---|---|---|
| Fund Name | State Street Energy Select Sector SPDR ETF | Vanguard Energy Index Fund ETF Shares |
| Issuer | State Street | Vanguard |
| Tracks Index | Energy Select Sector Index | MSCI US IMI Energy 25/50 |
| Expense Ratio | 0.09% ✓ | 0.10% |
| Cost per $10K/yr | $9.00 | $10.00 |
| AUM | $39.1B | $12.7B |
| Holdings | 23 | 115 |
| Inception | 1998 | 2004 |
| 1-Year Return | +52.85% | +51.01% |
| 3-Year Return | +18.28% | +17.96% |
| 5-Year Return | +22.75% | +22.33% |
| Dividend Yield | 2.48% | 2.37% |
| Holdings Overlap | See holdings overlap → | |
| Avg Bid-Ask Spread | 0.00% | 0.01% |
AUM and returns updated Oct 14, 2026 from ETF BFF database; expense ratios verified against issuer filings. Returns are annualised. Not investment advice.
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📊 XLE vs VDE: Annualised Returns
Annualised returns (trailing, price-based). Past performance does not guarantee future results.
🎯 Which Fund Fits Which Investor?
- want the lowest fees: saves ~$1/yr per $10K vs VDE
- already use State Street and prefer staying within one fund family
- want broader diversification (115 holdings vs 23)
- already use Vanguard and prefer staying within one fund family
💰 What the Fee Difference Actually Costs
Adjust the numbers for your situation. This models each fund's expense ratio compounding against your balance over time.
Assumes a constant annual return reinvested, with each fund's expense ratio deducted yearly. Illustrative only; actual returns vary. Past performance does not guarantee future results.
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Side-by-side holdings overlap, sector breakdown, and live performance tabs, all in one place.
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