XLE vs XLU: Head-to-Head Comparison
XLE vs XLU: Energy Select Sector SPDR Fund has an expense ratio of 0.09% while Utilities Select Sector SPDR Fund charges 0.09%. XLE holds 23 securities vs XLU's 31. 5-year returns: 14.20% vs 5.80%.
Last updated: April 2026
Energy vs Utilities
Quick Verdict
XLU edges out XLE with a stronger Beginner Suitability Score (8.5 vs 7.5). It offers better overall characteristics for new investors.
Side-by-Side Comparison
| Metric | XLE | XLU |
|---|---|---|
| Expense Ratio | 0.09% | 0.09% |
| AUM | $35.0B | $17.0B |
| Dividend Yield | 3.30% | 2.90% |
| Holdings | 23 | 31 |
| 1-Year Return | 9.50% | 14.20% |
| 5-Year Return (Ann.) | 14.20% | 5.80% |
| 10-Year Return (Ann.) | 5.50% | 7.20% |
| Beta | 1.12 | 0.55 |
| P/E Ratio | 13.5 | 19.8 |
XLE 5-year annualized return is 14.20% compared to XLU's 5.80%. Over 10 years, XLE returned 5.50% vs XLU's 7.20%.
View data table
| Period | XLE Return | XLU Return |
|---|---|---|
| YTD | 1.80% | 1.40% |
| 1 Year | 9.50% | 14.20% |
| 3 Year | 18.50% | 4.50% |
| 5 Year | 14.20% | 5.80% |
| 10 Year | 5.50% | 7.20% |
Key Differences Between XLE and XLU
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.
XLU (Utilities Select Sector SPDR Fund) is a utilities sector fund managed by State Street Global Advisors. XLU holds the utility companies from the S&P 500, including electric, gas, water, and renewable energy providers. Utilities are considered the most defensive equity sector because people always need electricity and water regardless of the economy. Beginners attracted to stability and income often use XLU as a bond alternative, since utilities pay reliable dividends and tend to fall less than other stocks during downturns.
The most notable differences are in fees (0.09% vs 0.09%), number of holdings (23 vs 31), and 5-year returns (14.20% vs 5.80%).
XLE vs XLU multi-factor comparison: XLE has a 0.09% expense ratio, 14.20% 5-year return, 23 holdings, 1.12 beta, and 3.30% yield. XLU has 0.09% expense ratio, 5.80% 5-year return, 31 holdings, 0.55 beta, and 2.90% yield.
View data table
| Metric | XLE | XLU |
|---|---|---|
| Expense Ratio | 0.09% | 0.09% |
| 5-Year Return | 14.20% | 5.80% |
| Holdings | 23 | 31 |
| Beta | 1.12 | 0.55 |
| Dividend Yield | 3.30% | 2.90% |
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Holdings Overlap Analysis
0%
Holdings Overlap
XLE and XLU share only 0% of their top holdings. These funds are quite different, making them complementary choices if you want broader market coverage.
XLE and XLU share 0% of their top holdings (low overlap). XLE has 23 total holdings and XLU has 31.
View data table
| Metric | XLE | XLU |
|---|---|---|
| Overlap | 0% | 0% |
| Unique Holdings | 100% | 100% |
| Total Holdings | 23 | 31 |
Cost Comparison Over Time
If you invest $10,000 and hold for 20 years (assuming 8% annual returns):
XLE
Fee cost: $771
XLU
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 XLU (0.09% fee) grows to $45,839. The fee difference costs $0.
View data table
| Year | XLE Value | XLU 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 XLU if: You want conservative income investors looking for a stock-based alternative to bond funds, those seeking the lowest-volatility equity sector to reduce overall portfolio risk, investors who want exposure to the growing electricity demand from ai and electrification. It's managed by State Street Global Advisors with an expense ratio of 0.09%.
Can You Own Both XLE and XLU?
Absolutely! With only 0% overlap, XLE and XLU 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 XLU?▾
XLU edges out XLE with a stronger Beginner Suitability Score (8.5 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 XLU is better suited for conservative income investors looking for a stock-based alternative to bond funds.
What is the difference between XLE and XLU?▾
XLE (Energy Select Sector SPDR Fund) tracks energy sector investments with 23 holdings and a 0.09% expense ratio. XLU (Utilities Select Sector SPDR Fund) focuses on utilities sector with 31 holdings at 0.09%. Their top holdings overlap by 0%.
Can I own both XLE and XLU?▾
Yes! With only 0% holdings overlap, XLE and XLU complement each other well. Owning both gives you broader diversification.