XLB vs VAW Stock Comparison: AI Score, Valuation, Performance and Upside
XLB and VAW both provide US materials sector exposure at similar low expense ratios. XLB holds only S&P 500 large-cap materials companies (~28 stocks) with high Linde concentration; VAW holds 115+ companies including small and mid-caps with broader diversification. For institutional traders needing liquidity, XLB is preferred. For buy-and-hold sector investors wanting full materials market coverage, VAW's broader diversification is more complete.
XLB vs VAW — XLB (the S&P 500 materials sector ETF with ~28 large-cap holdings concentrated in Linde, Air Products, and Sherwin-Williams at 0.09% expense ratio) versus VAW (the Vanguard materials ETF covering 115+ US materials companies including small and mid-caps for broader sector diversification at 0.10%).
XLB holds the edge across 5 of 5 key metrics in this comparison. XLB has delivered stronger 1-year price return (+24.74% vs +20.14% for VAW).
- want the most liquid materials ETF for tactical positioning — XLB's trading volume and bid-ask spreads are superior for short-term sector rotation
- value S&P 500 quality filter ensuring large-cap financial strength in materials holdings
- are comfortable with 20%+ Linde concentration and limited small/mid-cap materials exposure
- want the broadest US materials sector coverage including small and mid-cap companies in specialty chemicals, smaller miners, and packaging
- value Vanguard's index methodology for long-term buy-and-hold without concerns about short-term trading liquidity
- prefer slightly more diversification than XLB's concentrated large-cap portfolio for the same expense ratio
| Metric | XLB | VAW |
|---|---|---|
| ETF scorei | 27.3 | 25.1 |
| Latest closei | $51.95 | $227.88 |
| 1M returni | +6.06% | +3.82% |
| 3M returni | -1.27% | -3.28% |
| 6M returni | +1.54% | -1.62% |
| 1Y returni | +24.74% | +20.14% |
The ETF score weights long-term returns and risk-adjusted performance most heavily, but still rewards low expense ratios, larger fund size, and broader diversification — so it can favor low-cost, broad, mega-cap funds over smaller thematic or actively-managed funds even when the latter have delivered stronger returns.
How much would $10,000 be worth today if invested at the start of each period, with all dividends reinvested?
| Period | XLB | VAW |
|---|---|---|
| 1Y ago | $12.7K (+27.0%) started 2025-11-06 | $12.19K (+21.9%) started 2025-11-06 |
| 5Y ago | $14.31K (+43.1%) started 2021-11-08 | $13.96K (+39.6%) started 2021-11-08 |
| 10Y ago | $33.54K (+235.4%) started 2016-11-07 | $31.43K (+214.3%) started 2016-11-07 |
Hypothetical — past performance does not guarantee future results.
| Metric | XLB | VAW |
|---|---|---|
| Expense ratioi | 0.08% | 0.09% |
| Total assets (AUM)i | $8.45B | $4.38B |
| Dividend yieldi | 1.64% | 1.39% |
| Trailing P/Ei | 21.60 | 22.99 |
| Betai | 0.90 | 0.96 |
| 52-week change | 24.74% | 20.14% |
| Metric | XLB | VAW |
|---|---|---|
| 1Y returni | +24.74% | +20.14% |
| 6M returni | +1.54% | -1.62% |
| 3M returni | -1.27% | -3.28% |
| 1M returni | +6.06% | +3.82% |
| 1Y Sharpe ratio | 1.07 | 0.82 |
| Betai | 0.90 | 0.96 |
| Dividend yieldi | 1.64% | 1.39% |
| 5Y CAGR | +5.24% | +5.02% |
Over the past year, XLB and VAW have moved strongly in the same direction (correlation of 0.98), based on daily returns.
Lower drawdown and smaller single-period drops generally indicate a smoother ride, though they do not guarantee lower future risk.
| Period | Metric | XLB | VAW |
|---|---|---|---|
| 1Y | Growthi | +24.74% | +20.14% |
| CAGRi | +24.76% | +20.16% | |
| Volatilityi | 18.16% | 19.24% | |
| Sharpe ratioi | 1.07 | 0.82 | |
| Sortino ratioi | 1.58 | 1.19 | |
| Max drawdowni | 12.38% | 13.42% | |
| Current drawdowni | 3.62% | 5.66% | |
| Avg drawdowni | 3.24% | 4.10% | |
| Ulcer Indexi | 4.22% | 5.11% | |
| Max daily dropi | 2.91% | 2.95% | |
| Max wkly dropi | 6.65% | 7.29% | |
| 5Y | Growthi | +29.04% | +27.70% |
| CAGRi | +5.24% | +5.02% | |
| Volatilityi | 19.17% | 19.83% | |
| Sharpe ratioi | 0.13 | 0.12 | |
| Sortino ratioi | 0.18 | 0.17 | |
| Max drawdowni | 24.72% | 25.50% | |
| Current drawdowni | 3.62% | 5.66% | |
| Avg drawdowni | 7.00% | 7.02% | |
| Ulcer Indexi | 8.57% | 8.69% | |
| Max daily dropi | 6.26% | 6.11% | |
| Max wkly dropi | 13.94% | 13.49% | |
| 10Y | Growthi | +169.15% | +158.85% |
| CAGRi | +10.41% | +9.98% | |
| Volatilityi | 20.74% | 21.29% | |
| Sharpe ratioi | 0.37 | 0.34 | |
| Sortino ratioi | 0.52 | 0.48 | |
| Max drawdowni | 37.27% | 41.13% | |
| Current drawdowni | 3.62% | 5.66% | |
| Avg drawdowni | 6.43% | 7.01% | |
| Ulcer Indexi | 8.44% | 9.22% | |
| Max daily dropi | 11.01% | 11.07% | |
| Max wkly dropi | 20.92% | 21.38% |
| Category | XLB | VAW |
|---|---|---|
| Fund name | State Street Materials Select Sector SPDR ETF | Vanguard Materials Index Fund ETF Shares |
| Type | ETF | ETF |
| Expense ratioi | 0.08% | 0.09% |
| Total assets (AUM)i | $8.45B | $4.38B |
| Dividend yieldi | 1.64% | 1.39% |
- Low 0.09% expense ratio with high liquidity: XLB is the most traded materials ETF with tight bid-ask spreads — preferred for short-term tactical positioning in materials
- Industrial gas weighting (Linde) provides stability: Linde's infrastructure-like industrial gas business provides less cyclical earnings vs pure commodity materials companies
- S&P 500 large-cap quality filter: only S&P 500 companies qualify for XLB — ensuring large-cap quality and financial strength vs smaller materials companies
- 115+ holdings vs XLB's 28: VAW's broader holding base includes small and mid-cap materials companies — providing better diversification across the full US materials sector
- Small-cap materials growth exposure: smaller specialty chemical and materials companies in VAW's portfolio may offer higher growth rates than the large-cap Linde/Air Products focused XLB
- Same low expense ratio with broader coverage: VAW charges 0.10% for broader materials coverage — essentially the same cost as XLB for meaningfully more diversification
- Linde concentration at 20%+: XLB's single-stock concentration in Linde means XLB performance heavily tracks one industrial gas company — reducing diversification benefits
- Limited small/mid-cap materials exposure: XLB excludes smaller materials companies (specialty chemicals, smaller miners) that may offer higher growth than large-cap peers
- Commodity price cyclicality: Freeport-McMoRan, Newmont, and steel/chemical companies create cyclical earnings tied to copper, gold, and industrial production cycles
- Lower liquidity than XLB: VAW has lower trading volume than XLB — slightly wider bid-ask spreads for short-term tactical positions
- Small-cap materials higher risk: smaller materials companies in VAW face more financial stress in commodity downturns vs the large-cap industrial gas companies that provide XLB's stability
- MSCI index methodology vs S&P methodology creates minor composition differences that may matter for specific investor use cases
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