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 4 of 5 key metrics in this comparison. VAW has delivered stronger 1-year price return (+23.84% vs +21.42% for XLB).
- →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 score | 57.0 | 57.0 |
| Latest close | $51.81 | $234.24 |
| 1M return | +5.65% | +5.80% |
| 6M return | +15.75% | +14.04% |
| 1Y return | +21.42% | +23.84% |
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 | $12.38K (+23.8%) started 2025-06-18 | $12.58K (+25.8%) started 2025-06-18 |
| 5Y ago | $15.73K (+57.3%) started 2021-06-18 | $15.81K (+58.1%) started 2021-06-18 |
| 10Y ago | $32.96K (+229.6%) started 2016-06-20 | $32.45K (+224.5%) started 2016-06-20 |
Hypothetical — past performance does not guarantee future results.
| Metric | XLB | VAW |
|---|---|---|
| Expense ratio | 0.08% | 0.09% |
| Total assets (AUM) | $7.31B | $4.52B |
| Dividend yield | 1.71% | 1.37% |
| Trailing P/E | 26.17 | 25.00 |
| Beta | 0.94 | 0.98 |
| 52-week change | 21.42% | 23.84% |
| Metric | XLB | VAW |
|---|---|---|
| 1Y return | +21.42% | +23.84% |
| 6M return | +15.75% | +14.04% |
| 1M return | +5.65% | +5.80% |
| 1Y Sharpe ratio | 0.95 | 1.01 |
| Beta | 0.94 | 0.98 |
| Dividend yield | 1.71% | 1.37% |
| 5Y CAGR | +7.23% | +7.63% |
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 | Growth | +21.42% | +23.84% |
| CAGR | +21.44% | +23.86% | |
| Sharpe ratio | 0.95 | 1.01 | |
| Max drawdown | 12.38% | 13.42% | |
| Max daily drop | 2.68% | 2.95% | |
| Max wkly drop | 6.65% | 7.29% | |
| 5Y | Growth | +41.79% | +44.46% |
| CAGR | +7.23% | +7.63% | |
| Sharpe ratio | 0.23 | 0.24 | |
| Max drawdown | 24.72% | 25.50% | |
| Max daily drop | 6.26% | 6.11% | |
| Max wkly drop | 13.94% | 13.49% | |
| 10Y | Growth | +165.54% | +166.61% |
| CAGR | +10.27% | +10.31% | |
| Sharpe ratio | 0.36 | 0.36 | |
| Max drawdown | 37.27% | 41.13% | |
| Max daily drop | 11.01% | 11.07% | |
| Max wkly drop | 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 ratio | 0.08% | 0.09% |
| Total assets (AUM) | $7.31B | $4.52B |
| Dividend yield | 1.71% | 1.37% |
- →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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