GDX vs XLB: Which ETF Is Better in 2026?
A metric-by-metric comparison of VanEck Gold Miners ETF (GDX) and State Street Materials Select Sector SPDR ETF (XLB) — both Materials funds — using ETFValuer's daily-updated rankings.
Educational content — not financial advice. Data as of July 25, 2026. ~5 minute read.
The Verdict
GDX and XLB compete directly — both are Materials funds chasing the same job in a portfolio. That makes this a genuine either/or: the index each tracks, what it costs, and how it has handled drawdowns are what separate them, not the broad exposure they give you.
On ETFValuer's overall model — which blends return, risk-adjusted performance, cost, drawdown, size and volatility — GDX scores higher: 62.4 (Grade C) versus 53.7 for XLB. That doesn't make XLB a bad fund; it means GDX currently edges it out on this specific mix of factors. Read the metric-by-metric breakdown below before deciding which matters more for your own portfolio.
Head-to-Head: Every Metric
| GDX | XLB | |
|---|---|---|
| Category | Materials | Materials |
| Expense ratio | 0.51% | 0.08% |
| Fund size (AUM) | $22.8B | $8.2B |
| Dividend yield | 0.84% | 2.76% |
| 1-year return | +40.74% | +13.17% |
| 3-year return | +148.09% | +26.70% |
| Volatility | 48.31% | 17.68% |
| Max drawdown | -38.93% | -23.17% |
| Sharpe ratio | 0.74 | 0.46 |
| ETFValuer score | 62.4 | 53.7 |
| Grade | C | C |
| Overall rank | #205 | #350 |
Bold marks the better value in each row. "Better" is directional only (e.g. lower cost, higher return) — it isn't a recommendation by itself. See the full methodology.
Cost
XLB is the cheaper fund, charging 0.08% a year versus 0.51% for GDX — a gap of 0.43 percentage points (about $43.00/year on a $10,000 position) that compounds meaningfully over a multi-decade holding period. See the ETF Fee Calculator for the exact dollar impact at your investment size and horizon.
What GDX's Fees Cost You
GDX charges an expense ratio of 0.51% a year, deducted automatically from the fund's value. Small percentages compound into real money — adjust the figures below to see the impact on your own numbers.
Assumes a constant gross return and no additional contributions — a simplification, but it isolates exactly what the expense ratio costs. Try the full fee calculator to model contributions and compare any two funds.
Performance & Risk
Over the trailing 3 years, GDX returned +148.09% versus +26.70% for XLB — a gap of about 121.4 percentage points. On risk, XLB has held up better historically, with a shallower max drawdown (-23.17% vs. -38.93%). GDX currently has the better risk-adjusted return (Sharpe ratio of 0.74 vs. 0.46), meaning it delivered more return per unit of volatility taken on.
How Closely Do They Track Each Other?
Over the last 3.0 years of daily returns (752 shared trading days), GDX and XLB show a low correlation of 0.483 — largely independent of each other. These funds move largely on their own schedules. Combining them is a real diversification decision rather than a redundant one, which is the case where owning both can genuinely reduce portfolio volatility.
| Measure | Value | What it means |
|---|---|---|
| Daily return correlation | 0.483 | Low — largely independent of each other |
| R-squared | 23.4% | 23.4% of GDX's daily moves are explained by XLB's |
| Tracking error (annualised) | 33.86% | Typical yearly spread between the two funds' returns |
| Annualised return over 3.0y | GDX +35.08% · XLB +8.33% | GDX ahead by 26.75 points a year |
Correlation alone understates how far these can drift. Across every rolling 12-month window in the period, GDX finished as much as +188.1 points ahead of XLB at the best extreme and +2.2 points at the worst — a 185.9-point spread between the best and worst year of relative performance. Two funds can correlate tightly day to day and still deliver very different outcomes over any single year you happen to hold them.
Calculated from daily total returns over the trailing 3-year window, recomputed every day this site refreshes. Correlation of 1.00 means the two funds moved in lockstep; 0.00 means their daily moves were unrelated.
Holdings Overlap
GDX and XLB hold 1 of the same companies among their top 10 positions. Those shared names make up 10.8% of GDX and 7.4% of XLB. That's modest duplication — the funds are mostly distinct at the top, so holding both can still add diversification.
| Shared Holding | GDX Weight | XLB Weight |
|---|---|---|
| Newmont Corp | 10.77% | 7.36% |
Compares the top 10 reported holdings from each fund's most recent SEC N-PORT-P filing, so it understates total overlap — funds tracking similar indexes overlap far more deeply than the top 10 alone can show. Search any company across all tracked funds with the Stock Overlap tool.
Which One Should You Pick?
Lean GDX if…
- You care about return per unit of risk — its Sharpe ratio of 0.74 beats 0.46
- You weight recent results heavily — it returned 148.1% over 3 years against 26.7%
Lean XLB if…
- You want the lower running cost — 0.08% vs 0.51%, about $43 a year less on a $10,000 position
- Current income matters to you — it yields 2.76% against 0.84%
- It has been the calmer ride (17.7% volatility vs 48.3%) with a shallower worst-case fall (-23.2% vs -38.9%)
Whichever you pick, holding both at full weight is usually the wrong answer — see the overlap and correlation sections above.
Frequently Asked Questions
Is GDX or XLB better?
On ETFValuer's overall model — which blends return, risk-adjusted performance, cost, drawdown, size and volatility — GDX scores higher: 62.4 (Grade C) versus 53.7 for XLB. That doesn't make XLB a bad fund; it means GDX currently edges it out on this specific mix of factors. Read the metric-by-metric breakdown below before deciding which matters more for your own portfolio.
Which has the lower expense ratio, GDX or XLB?
XLB currently has the lower expense ratio (0.08% vs. 0.51%).
Can I hold both GDX and XLB?
Yes, and it may be worth doing. GDX and XLB correlate at only 0.48 over the past 3.0 years, so they behave differently enough that holding both is a genuine diversification decision rather than a redundant one. Size each to the role you want it to play.
Go deeper on either fund
Full daily-updated metrics, holdings context, and category peers.