What is the fee difference between VPU and XLU?

VPU charges 0.09% a year and XLU charges 0.08%. On $10,000 that is about $9 for VPU and $8 for XLU, a difference of roughly $1 a year. The gap is small enough that holdings breadth and fund size matter more than cost when choosing between them.

What index does each fund track?

VPU tracks the MSCI US IMI 25/50 Utilities index, which covers large, mid and small US utility companies, giving it 75 holdings. XLU tracks the S&P Utilities Select Sector index, the utilities within the S&P 500 only, giving it 34 holdings. Both are weighted by market value.

How much do VPU and XLU overlap?

Their 10 largest holdings are identical: NextEra Energy, Southern Company, Duke Energy, Constellation Energy, American Electric Power, Dominion Energy, Sempra, Entergy, Xcel Energy and Vistra. The weights differ slightly because VPU spreads assets across 41 additional smaller companies that XLU does not hold.

Which pays a higher dividend?

The yields are almost the same. XLU shows 2.94% and VPU 2.91%. Both are well above the roughly 1% typical of broad US market funds, which is why utility ETFs are often used by investors seeking income. Yields change with prices and payouts.

Which fund suits which goal?

VPU suits investors who want the whole US utilities sector, including smaller companies, at a low cost. XLU suits investors who want only the large, established utilities of the S&P 500 in a bigger, more heavily traded fund. In practice the two behave very similarly because the same large names dominate both.

Which is bigger and more liquid?

XLU is larger, with $21.15 billion in net assets against $8.02 billion for VPU. Both are large enough that retail investors can trade them easily, but XLU's size and its place in the widely used Select Sector SPDR range typically mean higher trading volumes.

How are utility ETF dividends taxed?

Both funds are US-listed, so non-US investors may face US withholding tax on dividends at a treaty rate. Because these funds yield close to 3%, the income component and its tax treatment are more significant than for a broad market fund. Rules vary by country and account type.

Can I hold both VPU and XLU?

You can, but there is little reason to. The two funds share the same top 10 holdings and track the same sector, so holding both duplicates exposure while paying two expense ratios. Investors who want the extra small-cap utilities in VPU usually just choose VPU.

Why do investors buy utility ETFs?

Utilities provide electricity, gas and water under regulated pricing, so their revenues tend to be steadier than most sectors and they often pay above-average dividends. Both VPU and XLU yield close to 3%. The trade-off is limited growth and sensitivity to interest rates, which affect both the sector's borrowing costs and how its dividends compare with bonds.

VPU vs XLU

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

VPU and XLU both hold US utilities and share the same 10 largest holdings, led by NextEra Energy and Southern Company. VPU tracks the MSCI US IMI 25/50 Utilities index with 75 stocks for 0.09% a year; XLU tracks the S&P Utilities Select Sector index with 34 stocks for 0.08%. Yields are 2.91% and 2.94%. VPU adds smaller utilities, while XLU sticks to the largest names. Educational content, not financial advice.

VPU and XLU both hold US utilities and share the same 10 largest holdings, led by NextEra Energy and Southern Company. VPU tracks the MSCI US IMI 25/50 Utilities index with 75 stocks for 0.09% a year;...

Fund Snapshot

Key Fund Metrics

VPU

Metric

XLU

0.09%

Expense Ratio

0.08%

2.91%

Dividend Yield

2.94%

$8.02B

Net Assets

$21.15B

75

Holdings

34

Jan 26, 2004

Inception Date

Dec 16, 1998

MSCI US IMI 25/50 Utilities

Index Tracked

S&P Utilities Select Sector

Utilities

Fund Category

Utilities

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

Shared Top Holdings

Holding	VPU	XLU
NEENextEra Energy, Inc.	11.73%	13.06%
SOThe Southern Company	6.78%	7.53%
DUKDuke Energy Corporation	6.39%	7.12%
CEGConstellation Energy Corporation	5.86%	6.47%
AEPAmerican Electric Power Company, Inc.	4.55%	5.10%
DDominion Energy, Inc.	3.97%	4.36%
SRESempra	3.65%	4.14%
ETREntergy Corporation	3.39%	3.64%
XELXcel Energy Inc.	3.23%	3.54%
VSTVistra Corp.	3.16%	3.51%

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Investment Analysis

VPU

Pros

Holds 75 utilities including mid and small caps, more than double XLU's 34.
Slightly less concentrated: NextEra Energy is 11.73% of VPU versus 13.06% of XLU.
Low 0.09% expense ratio from Vanguard, with a history back to January 2004.

Considerations

Smaller fund at $8.02 billion in net assets, against $21.15 billion for XLU.
Expense ratio of 0.09% is a touch higher than XLU's 0.08%.
Dividend yield of 2.91% is marginally below XLU's 2.94%.

XLU

Pros

Expense ratio of 0.08%, the lower of the two at $8 per $10,000 a year.
Larger fund with $21.15 billion in net assets and a history back to 1998.
Dividend yield of 2.94%, slightly ahead of VPU's 2.91%.

Considerations

Only 34 holdings, all large caps from the S&P 500 utilities sector.
NextEra Energy alone is 13.06% of the fund, the highest single weight of the two.
No exposure to smaller utilities that VPU includes further down its list.

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