VIS vs XAR: Which ETF Is Better in 2026?
A metric-by-metric comparison of Vanguard Industrials Index Fund ETF Shares (VIS) and State Street SPDR S&P Aerospace & Defense ETF (XAR) — both Industrials funds — using ETFValuer's daily-updated rankings.
Educational content — not financial advice. Data as of July 25, 2026. ~5 minute read.
The Verdict
VIS and XAR compete directly — both are Industrials 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 — VIS scores higher: 67.7 (Grade B) versus 63.1 for XAR. That doesn't make XAR a bad fund; it means VIS 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
| VIS | XAR | |
|---|---|---|
| Category | Industrials | Industrials |
| Expense ratio | 0.09% | 0.35% |
| Fund size (AUM) | $9.0B | $6.5B |
| Dividend yield | 0.63% | 0.28% |
| 1-year return | +20.93% | +22.11% |
| 3-year return | +71.25% | +118.52% |
| Volatility | 17.65% | 28.22% |
| Max drawdown | -20.80% | -19.73% |
| Sharpe ratio | 0.90 | 0.61 |
| ETFValuer score | 67.7 | 63.1 |
| Grade | B | C |
| Overall rank | #145 | #194 |
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
VIS is the cheaper fund, charging 0.09% a year versus 0.35% for XAR — a gap of 0.26 percentage points (about $26.00/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 XAR's Fees Cost You
XAR charges an expense ratio of 0.35% 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, XAR returned +118.52% versus +71.25% for VIS — a gap of about 47.3 percentage points. On risk, XAR has held up better historically, with a shallower max drawdown (-19.73% vs. -20.80%). VIS currently has the better risk-adjusted return (Sharpe ratio of 0.90 vs. 0.61), 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), VIS and XAR show a strong correlation of 0.805 — clearly related, with room to diverge. There is some genuine differentiation here, but not enough to call these complementary holdings. Pairing them mostly concentrates risk rather than spreading it.
| Measure | Value | What it means |
|---|---|---|
| Daily return correlation | 0.805 | Strong — clearly related, with room to diverge |
| R-squared | 64.7% | 64.7% of VIS's daily moves are explained by XAR's |
| Tracking error (annualised) | 14.21% | Typical yearly spread between the two funds' returns |
| Annualised return over 3.0y | VIS +20.07% · XAR +31.00% | XAR ahead by 10.93 points a year |
Correlation alone understates how far these can drift. Across every rolling 12-month window in the period, VIS finished as much as +6.9 points ahead of XAR at the best extreme and -47.4 points at the worst — a 54.3-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
VIS and XAR hold 2 of the same companies among their top 10 positions. Those shared names make up 5.8% of VIS and 6.2% of XAR. That's modest duplication — the funds are mostly distinct at the top, so holding both can still add diversification.
| Shared Holding | VIS Weight | XAR Weight |
|---|---|---|
| RTX Corp | 3.82% | 3.08% |
| Lockheed Martin Corp | 1.95% | 3.08% |
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 VIS if…
- You want the lower running cost — 0.09% vs 0.35%, about $26 a year less on a $10,000 position
- Current income matters to you — it yields 0.63% against 0.28%
- It has been the calmer ride (17.6% volatility vs 28.2%)
- You care about return per unit of risk — its Sharpe ratio of 0.90 beats 0.61
Lean XAR if…
- You weight recent results heavily — it returned 118.5% over 3 years against 71.2%
Whichever you pick, holding both at full weight is usually the wrong answer — see the overlap and correlation sections above.
Frequently Asked Questions
Is VIS or XAR better?
On ETFValuer's overall model — which blends return, risk-adjusted performance, cost, drawdown, size and volatility — VIS scores higher: 67.7 (Grade B) versus 63.1 for XAR. That doesn't make XAR a bad fund; it means VIS 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, VIS or XAR?
VIS currently has the lower expense ratio (0.09% vs. 0.35%).
Can I hold both VIS and XAR?
Yes, and it may be worth doing. VIS and XAR correlate at only 0.80 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.