IWM vs XLU: Correlation & Overlap
How closely do iShares Russell 2000 ETF (IWM) and Utilities Select Sector SPDR Fund (XLU) trade together? Their weekly returns over three years give a correlation of 0.32, which is moderate. The two funds also share 0% of their portfolios by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are IWM and XLU?
Across a 3-year window, the weekly returns of IWM and XLU correlate at 0.32, moderate. Lately the two have drifted apart, with the 1-year correlation at 0.10 versus 0.32 over 3 years. Stretching to 5 years gives 0.39, with an annualized covariance of 100.5 %².
Within IWM's tracked universe of 320 assets, XLU comes in at #308 by 3-year correlation. Correlation aside, the last 12 months split them widely, with IWM ahead by 24.3 points (+28.4% versus +4.1%). Do not treat this figure as fixed: across three years the rolling one-year correlation ranged all the way from 0.05 to 0.60.
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.
IWM vs XLU: side by side
| IWM (iShares Russell 2000 ETF) | XLU (Utilities Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +28.4% | +4.1% |
| 5-year return | +41.5% | +46.3% |
| Volatility (ann.) | 19.8% | 15.8% |
| Beta vs S&P 500 | 1.06 | 0.26 |
| Max drawdown (3Y) | -27.5% | -13.1% |
| Dividend yield | 0.91% | 2.70% |
| Expense ratio | 0.19% | 0.08% |
| Assets under management | $80.1B | $23.1B |
| Sector / category | ETF · US Small & Mid Cap | Sector ETF |
IWM, iShares's Small Blend fund, carries $80.1B under management, 1757 holdings, a 0.19% expense ratio, a 0.91% trailing dividend yield. XLU is an Utilities fund from State Street Investment Management: $23.1B under management, 31 holdings, a 0.08% expense ratio, a 2.70% trailing dividend yield.
Portfolio overlap between IWM and XLU
The two portfolios are largely distinct: 0% of the funds' weight sits in the same underlying holdings (0 common positions). Correlation tells you they move together; overlap tells you why.
Largest positions held only by IWM: MOGA (0.35%), UMBF (0.34%), CYTK (0.33%), GKOS (0.33%), EAT (0.33%). Only by XLU: NEE (12.94%), SO (7.45%), DUK (7.00%), CEG (6.58%), AEP (4.94%).
Overlap = sum of the smaller of the two weights across common holdings, from issuer disclosures as of 2026-08-26.
Year-by-year returns
| Year | IWM | XLU |
|---|---|---|
| 2022 | -20.5% | +1.4% |
| 2023 | +16.8% | -7.2% |
| 2024 | +11.4% | +23.3% |
| 2025 | +12.7% | +16.0% |
| 2026 | +22.3% | +2.5% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are IWM and XLU good diversifiers for each other?
Yes, to a useful degree: a correlation of 0.32 leaves real independence between the two, which historically damped combined volatility.
FAQ
What is the correlation between IWM and XLU?
The IWM/XLU correlation stands at 0.32 on a 3-year window (1 year: 0.10, 5 years: 0.39), computed from weekly returns as of 2026-08-27.
Is XLU a good diversifier for IWM?
Yes, to a useful degree: a correlation of 0.32 leaves real independence between the two, which historically damped combined volatility.
How much do IWM and XLU overlap?
Per the issuers' own portfolio disclosures (2026-08-26), the overlap is 0% by weight over 0 common positions.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/iwm-vs-xlu.json
Drop this badge in a README or notebook; it updates with the data:
[](https://www.pairbook.io/pair/iwm-vs-xlu/)
The core API is free. Terms and every endpoint in the API documentation.
Related comparisons
Hubs: IWM correlations · XLU correlations
