XLE vs XLF: Head-to-Head Comparison
XLE vs XLF: Energy Select Sector SPDR Fund has an expense ratio of 0.09% while Financial Select Sector SPDR Fund charges 0.09%. XLE holds 23 securities vs XLF's 73. 5-year returns: 14.20% vs 12.80%.
Last updated: April 2026
Sector
Quick Verdict
XLF edges out XLE with a stronger Beginner Suitability Score (8 vs 7.5). It offers better overall characteristics for new investors.
Side-by-Side Comparison
| Metric | XLE | XLF |
|---|---|---|
| Expense Ratio | 0.09% | 0.09% |
| AUM | $35.0B | $45.0B |
| Dividend Yield | 3.30% | 1.60% |
| Holdings | 23 | 73 |
| 1-Year Return | 9.50% | 28.50% |
| 5-Year Return (Ann.) | 14.20% | 12.80% |
| 10-Year Return (Ann.) | 5.50% | 11.20% |
| Beta | 1.12 | 1.08 |
| P/E Ratio | 13.5 | 17.2 |
XLE 5-year annualized return is 14.20% compared to XLF's 12.80%. Over 10 years, XLE returned 5.50% vs XLF's 11.20%.
View data table
| Period | XLE Return | XLF Return |
|---|---|---|
| YTD | 1.80% | 3.50% |
| 1 Year | 9.50% | 28.50% |
| 3 Year | 18.50% | 10.50% |
| 5 Year | 14.20% | 12.80% |
| 10 Year | 5.50% | 11.20% |
Key Differences Between XLE and XLF
XLE (Energy Select Sector SPDR Fund) is a energy sector fund managed by State Street Global Advisors. XLE holds the energy companies from the S&P 500, including major oil and gas producers, refiners, and energy equipment providers. It is the most popular way to get targeted exposure to the traditional energy sector. Beginners should understand that XLE is heavily tied to oil and gas prices, making it a cyclical investment that can deliver strong returns when energy prices rise but suffer during downturns.
XLF (Financial Select Sector SPDR Fund) is a financial sector fund managed by State Street Global Advisors. XLF tracks the financial sector of the S&P 500, including banks, insurance companies, asset managers, and financial services firms. The financial sector is a major pillar of the U.S. economy and tends to benefit from rising interest rates and economic growth. Beginners should know that XLF provides targeted exposure to one sector, which makes it more volatile than a diversified fund but useful for investors with specific views on the financial industry.
The most notable differences are in fees (0.09% vs 0.09%), number of holdings (23 vs 73), and 5-year returns (14.20% vs 12.80%).
XLE vs XLF multi-factor comparison: XLE has a 0.09% expense ratio, 14.20% 5-year return, 23 holdings, 1.12 beta, and 3.30% yield. XLF has 0.09% expense ratio, 12.80% 5-year return, 73 holdings, 1.08 beta, and 1.60% yield.
View data table
| Metric | XLE | XLF |
|---|---|---|
| Expense Ratio | 0.09% | 0.09% |
| 5-Year Return | 14.20% | 12.80% |
| Holdings | 23 | 73 |
| Beta | 1.12 | 1.08 |
| Dividend Yield | 3.30% | 1.60% |
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Holdings Overlap Analysis
0%
Holdings Overlap
XLE and XLF share only 0% of their top holdings. These funds are quite different, making them complementary choices if you want broader market coverage.
XLE and XLF share 0% of their top holdings (low overlap). XLE has 23 total holdings and XLF has 73.
View data table
| Metric | XLE | XLF |
|---|---|---|
| Overlap | 0% | 0% |
| Unique Holdings | 100% | 100% |
| Total Holdings | 23 | 73 |
Cost Comparison Over Time
If you invest $10,000 and hold for 20 years (assuming 8% annual returns):
XLE
Fee cost: $771
XLF
Fee cost: $771
Over 20 years, the fee difference amounts to $0 on a $10,000 investment. The cost difference is negligible — choose based on other factors.
On a $10,000 investment over 20 years at 8% return, XLE (0.09% fee) grows to $45,839 while XLF (0.09% fee) grows to $45,839. The fee difference costs $0.
View data table
| Year | XLE Value | XLF Value |
|---|---|---|
| 0 | $10,000 | $10,000 |
| 5 | $14,632 | $14,632 |
| 10 | $21,410 | $21,410 |
| 15 | $31,327 | $31,327 |
| 20 | $45,839 | $45,839 |
Which One Should a Beginner Choose?
Choose XLE if: You want investors who want to overweight energy based on their outlook for oil and gas prices, income seekers attracted to the high dividends paid by profitable energy companies, tactical investors using energy as an inflation hedge during rising commodity price environments. It's managed by State Street Global Advisors with an expense ratio of 0.09%.
Choose XLF if: You want investors who want to overweight the financial sector in their portfolio, those who believe rising interest rates will benefit banks and financial companies, value-oriented investors attracted to the sector's lower price-to-earnings ratio. It's managed by State Street Global Advisors with an expense ratio of 0.09%.
Can You Own Both XLE and XLF?
Absolutely! With only 0% overlap, XLE and XLF complement each other well. A simple portfolio might allocate 60% to one and 40% to the other, or you could pair them with a bond ETF like BND for a complete three-fund portfolio.
Frequently Asked Questions
Should I buy XLE or XLF?▾
XLF edges out XLE with a stronger Beginner Suitability Score (8 vs 7.5). It offers better overall characteristics for new investors. However, both are solid options. XLE is best for investors who want investors who want to overweight energy based on their outlook for oil and gas prices, while XLF is better suited for investors who want to overweight the financial sector in their portfolio.
What is the difference between XLE and XLF?▾
XLE (Energy Select Sector SPDR Fund) tracks energy sector investments with 23 holdings and a 0.09% expense ratio. XLF (Financial Select Sector SPDR Fund) focuses on financial sector with 73 holdings at 0.09%. Their top holdings overlap by 0%.
Can I own both XLE and XLF?▾
Yes! With only 0% holdings overlap, XLE and XLF complement each other well. Owning both gives you broader diversification.