What are expense ratios in ETFs and how do they impact returns?

Expense ratios are annual fees charged by an ETF, expressed as a percentage of assets. They reduce net returns. Lower expense ratios are generally better, assuming all else is equal. In this case, one fund has a 0.09% ratio and the other 0.08%, a tiny difference. Over time, lower fees help compound returns more efficiently.

What are top holdings and why do they matter?

Top holdings are the largest positions within an ETF by market value. They significantly influence performance. In this comparison, both funds are heavily concentrated in major energy stocks such as ExxonMobil and Chevron. A few large positions drive a substantial portion of the fund’s overall results, highlighting the importance of individual company performance.

What is an ETF dividend yield?

An ETF dividend yield shows the income generated by the underlying stocks, expressed as a percentage of the fund’s price. It helps estimate income. In this case, one fund offers a 2.33% yield, while the other provides 2.47%. These figures indicate slight differences in expected distributions, depending on the fund’s holdings and performance.

How do the two ETFs compare on expenses?

Fund A charges a 0.09% expense ratio, while Fund B charges 0.08%. The difference is only 0.01 percentage points. While tiny, lower fees can enhance net returns over long investment horizons by reducing cost drag.

Are the holdings of both ETFs identical?

Both ETFs share the same top nine holdings: XOM, CVX, COP, MPC, VLO, PSX, SLB, WMB and EOG. However, weights differ; for example, Fund B has higher exposure to XOM and CVX and includes TRGP as the tenth holding, whereas Fund A includes BKR.

Which ETF has a higher dividend yield?

Fund B has a slightly higher dividend yield of 2.47%, compared to 2.33% for Fund A. While the difference is small, it indicates a modest advantage in income potential, although yields are subject to change based on holdings’ dividend policies.

Which ETF typically provides better liquidity?

Fund B, with net assets of $41.3 billion, generally provides better liquidity than Fund A, which has $10.9 billion. Higher assets under management often mean tighter bid-ask spreads, making it easier for investors to buy and sell shares at favourable prices.

How do sector concentrations compare?

Both ETFs are heavily concentrated in the Energy sector, with major positions in XOM and CVX driving performance. Fund B has greater weighting in these two names compared to Fund A. Investors should consider the inherent volatility in sector-specific concentration.

What risks are tied to smaller holdings?

Smaller holdings such as BKR in Fund A or TRGP in Fund B expose investors to individual company risks. While these positions may offer growth opportunities, they can also contribute to increased volatility, making it essential to diversify beyond just sector ETFs.

How do these ETFs fit into long-term goals?

Fund A might suit investors seeking broad sector exposure with lower asset size, while Fund B may attract those prioritising liquidity and marginally lower expenses. Neither fund is inherently better; the choice depends on individual priorities such as cost efficiency, liquidity and portfolio fit.

Should I use this comparison as financial advice?

No. This page provides educational information only, based on public data. It does not constitute financial advice. Always conduct your own research or consult a qualified financial professional before making investment decisions.

VDE vs XLE

Two funds, one decision: we compare cost, performance and what each ETF actually holds in September 2026.

Compare Vanguard Energy ETF (VDE) and Energy Select Sector SPDR Fund (XLE). This page examines expense ratios, top holdings, dividend yields and how each fund tracks its market to help you understand their similarities and differences. Educational content, not financial advice.

Fund Snapshot

Key Fund Metrics

VDE

Metric

XLE

0.09%

Expense Ratio

0.08%

2.33%

Dividend Yield

2.47%

$10.94B

Net Assets

$41.31B

117

Holdings

Sep 23, 2004

Inception Date

Dec 16, 1998

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Index Tracked

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Equity Energy

Fund Category

Equity Energy

XLE costs about $1.00 less per year for every $10,000 invested.

Shared Top Holdings

Holding	VDE	XLE
XOMExxonMobil Holdings Corporation	21.82%	23.09%
CVXChevron Corporation	14.03%	17.71%
COPConocoPhillips	5.99%	6.78%
MPCMarathon Petroleum Corporation	4.06%	4.83%
VLOValero Energy Corporation	3.98%	4.82%
PSXPhillips 66	3.67%	4.75%
SLBSLB N.V.	3.36%	3.87%
WMBThe Williams Companies, Inc.	3.36%	4.35%
EOGEOG Resources, Inc.	2.89%	3.86%

Discover More Comparisons

VDE vs VPU

Compare VDE and VPU on fees, holdings and dividends. VDE offers energy exposure while VPU focuses on utilities, both with 0.09% expense ratios.

FENY vs XLE

Compare FENY and XLE energy ETFs. Review 0.08% fees, $2.1bn vs $41.3bn assets, yields, holdings and tracking. Neutral data for informed research.

IXC vs XLE

Compare IXC and XLE ETFs. Analyse fees of 0.37% vs 0.08%, top holdings like XOM and CVX, and dividends of 2.76% vs 2.47% to decide which to research.

Investment Analysis

VDE

Pros

Investors benefit from a low 0.09% annual expense ratio, reducing long-term cost drag.
The fund provides broad sector exposure through substantial assets totalling $10.9 billion.
A dividend yield of 2.33% offers a modest income stream from energy holdings.

Considerations

Sector concentration is high, with major positions in XOM and CVX driving performance.
Liquidation risks may exist for smaller holdings like BKR compared to fund giants.
The index tracked is not available, limiting transparency on benchmark construction methods.

XLE

Pros

A 0.08% expense ratio keeps costs marginally lower than many comparable energy funds.
Substantial assets of $41.3 billion ensure strong liquidity and stable market operation.
A dividend yield of 2.47% provides slightly better income than similar sector alternatives.

Considerations

Performance heavily depends on top holdings, including XOM and CVX combined weights.
The absence of disclosed sector weights restricts precise portfolio allocation assessments.
Concentrated positions like TRGP expose investors to individual stock volatility risks.

About VDE and XLE

VDE (VDE)

The Vanguard Energy ETF offers investors diversified exposure to the global energy sector. As a passively managed fund, it aims to track the performance of a broad energy industry benchmark by holding shares in leading energy companies worldwide. With an impressive low expense ratio of 0.09%, this fund provides a cost-effective way to gain sector-specific exposure while keeping fees minimal. Recent verified data highlights its strong position with USD 10.94 billion in net assets and 117 holdings, ensuring breadth and diversification within the energy space. It currently offers a competitive dividend yield of 2.33%, making it attractive for those looking to generate steady income alongside potential capital growth. Established in September 2004, this fund has a long track record, providing investors with a familiar tool to navigate the evolving energy landscape, from traditional resources to the energy transition.

XLE (XLE)

The Energy Select Sector SPDR Fund (XLE) is an exchange-traded fund designed to track the performance of the energy sector in the United States. It holds a diversified basket of companies involved in oil and gas exploration, refining, and distribution. With an expense ratio of just 0.08%, it remains a low-cost option for investors seeking exposure to this specific industry. The fund currently manages approximately USD 41.31 billion in net assets and holds around 24 stocks, providing concentrated yet significant access to major energy players. Since its inception in December 1998, XLE has served as a key tool for those looking to invest in energy trends. While it offers a dividend yield of 2.47%, investors should remember that energy prices can be volatile, causing the fund’s value to rise and fall.

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VDE vs XLE

Fund Snapshot