IVZ vs XLF: Correlation
Invesco (IVZ) and Financial Select Sector SPDR Fund (XLF) show a strong relationship: their 3-year correlation of weekly returns is 0.60.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are IVZ and XLF?
On 3 years of weekly data the IVZ/XLF correlation comes out at 0.60, strong. The link has loosened recently: the 1-year correlation (0.30) runs below the 3-year figure (0.60). The 5-year figure is 0.67, and annualized covariance runs at 318.5 %².
Within IVZ's tracked universe of 33 assets, XLF comes in at #19 by 3-year correlation. Their recent paths diverged sharply: over the last 12 months IVZ outperformed by 46.6 percentage points (+55.9% for IVZ against +9.3% for XLF). On a rolling one-year basis the correlation drifted between 0.30 and 0.78, a moderate band. Note the risk asymmetry: IVZ runs 2.0 times the annualized volatility of the other leg, so equal-weighting the two is not an equal-risk position.
How is this computed?
Pearson correlation on weekly returns: ρ(A,B) = cov(rA, rB) / (σA · σB), over windows of 52, 156 and 260 weeks. Covariance is annualized (×52) and expressed in %². Full definitions on the methodology page.
IVZ vs XLF: side by side
| IVZ (Invesco) | XLF (Financial Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +55.9% | +9.3% |
| 5-year return | +63.7% | +64.2% |
| Volatility (ann.) | 32.6% | 16.2% |
| Beta vs S&P 500 | 1.29 | 0.84 |
| Max drawdown (3Y) | -36.5% | -15.5% |
| Market cap | $14.7B | – |
| P/E (trailing) | – | – |
| Dividend yield | 2.58% | 1.42% |
| Expense ratio | – | 0.08% |
| Assets under management | – | $57.9B |
| Sector / category | Financials | Sector ETF |
XLF is a Financial fund from State Street Investment Management: $57.9B under management, 77 holdings, a 0.08% expense ratio, a 1.42% trailing dividend yield.
Year-by-year returns
| Year | IVZ | XLF |
|---|---|---|
| 2022 | -18.7% | -10.6% |
| 2023 | +4.2% | +12.0% |
| 2024 | +3.0% | +30.6% |
| 2025 | +56.9% | +14.9% |
| 2026 | +29.7% | +6.6% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Fund exposure
Keep in mind that XLF holds IVZ at a 0.18% weight, which makes a slice of this correlation mechanical rather than coincidental.
Are IVZ and XLF good diversifiers for each other?
To a limited degree. At 0.60 the two still catch most of the same waves, so the pair smooths returns a little without insulating either from a shared selloff.
FAQ
What is the correlation between IVZ and XLF?
As of 2026-08-27, the correlation of weekly returns between IVZ and XLF is 0.60 over 3 years, 0.30 over 1 year and 0.67 over 5 years.
Is XLF a good diversifier for IVZ?
To a limited degree. At 0.60 the two still catch most of the same waves, so the pair smooths returns a little without insulating either from a shared selloff.
What does a correlation of 0.60 mean?
On the −1 to +1 scale, 0.60 describes how much the two returns move together: +1 is lockstep, 0 is independence, negative values mean opposite directions. It says nothing about which performed better.
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Related comparisons
Hubs: IVZ correlations · XLF correlations
