MTUM vs XLY: Correlation & Overlap
How closely do iShares MSCI USA Momentum Factor ETF (MTUM) and Consumer Discretionary Select Sector SPDR Fund (XLY) trade together? Their weekly returns over three years give a correlation of 0.69, which is strong. Looking through to holdings, 2.6% of the two portfolios is the same by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are MTUM and XLY?
On 3 years of weekly data the MTUM/XLY correlation comes out at 0.69, strong. Lately the two have drifted apart, with the 1-year correlation at 0.51 versus 0.69 over 3 years. The 5-year figure is 0.70, and annualized covariance runs at 279.3 %².
Within MTUM's tracked universe of 109 assets, XLY comes in at #33 by 3-year correlation. Their recent paths diverged sharply: over the last 12 months MTUM outperformed by 25.3 percentage points (+25.2% for MTUM against -0.1% for XLY). The rolling one-year correlation moved between 0.52 and 0.83 over the past three years, a moderate range.
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.
MTUM vs XLY: side by side
| MTUM (iShares MSCI USA Momentum Factor ETF) | XLY (Consumer Discretionary Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +25.2% | -0.1% |
| 5-year return | +76.1% | +31.8% |
| Volatility (ann.) | 20.6% | 19.7% |
| Beta vs S&P 500 | 1.25 | 1.15 |
| Max drawdown (3Y) | -21.0% | -26.0% |
| Dividend yield | 0.62% | 0.78% |
| Expense ratio | 0.15% | 0.08% |
| Assets under management | $25.3B | $22.5B |
| Sector / category | ETF · US Style | Sector ETF |
MTUM is a Large Blend fund from iShares: $25.3B under management, 126 holdings, a 0.15% expense ratio, a 0.62% trailing dividend yield. XLY is a Consumer Cyclical fund from State Street Investment Management: $22.5B under management, 47 holdings, a 0.08% expense ratio, a 0.78% trailing dividend yield.
Portfolio overlap between MTUM and XLY
The two portfolios are largely distinct. Weighing the shared positions, 2.6% of the two funds is identical, spread across 7 common holdings. That shared book is a large part of why the returns line up.
| Common holding | Weight in MTUM | Weight in XLY |
|---|---|---|
| TJX | 0.56% | 3.55% |
| ROST | 0.53% | 1.90% |
| MAR | 0.46% | 1.96% |
| HLT | 0.40% | 1.89% |
| GM | 0.30% | 1.94% |
| EBAY | 0.21% | 1.15% |
| TPR | 0.14% | 0.66% |
Largest positions held only by MTUM: MU (6.60%), AMD (5.09%), AVGO (4.25%), INTC (3.91%), XOM (3.78%). Only by XLY: AMZN (24.32%), TSLA (16.18%), HD (5.54%), MCD (4.11%), BKNG (4.04%).
Overlap = sum of the smaller of the two weights across common holdings, from issuer disclosures as of 2026-08-26. Top 7 common positions shown.
Year-by-year returns
| Year | MTUM | XLY |
|---|---|---|
| 2022 | -18.3% | -36.3% |
| 2023 | +9.1% | +39.6% |
| 2024 | +32.9% | +26.5% |
| 2025 | +22.1% | +7.4% |
| 2026 | +21.8% | -2.6% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are MTUM and XLY good diversifiers for each other?
Only partially. A correlation of 0.69 means MTUM and XLY share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
FAQ
What is the correlation between MTUM and XLY?
Using weekly returns as of 2026-08-27: 0.69 over 3 years, with 0.51 over the last year and 0.70 over 5 years.
Is XLY a good diversifier for MTUM?
Only partially. A correlation of 0.69 means MTUM and XLY share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
How much do MTUM and XLY overlap?
The two funds share 7 holdings amounting to 2.6% of weight, per issuer portfolio files dated 2026-08-26.
Use this data
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Hubs: MTUM correlations · XLY correlations
