QQQM vs XLC: Correlation & Overlap
Measured on weekly returns over the past three years, Invesco Nasdaq 100 ETF (QQQM) and Communication Services Select Sector SPDR Fund (XLC) carry a correlation of 0.77, a strong link. By holdings, the two funds overlap 12.6% by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are QQQM and XLC?
Over the past 3 years, QQQM and XLC moved with a correlation of 0.77, which is strong. The relationship has been stable: the 1-year correlation (0.67) sits close to the 3-year figure. Over 5 years the correlation is 0.82, and the annualized covariance of weekly returns is 239.7 %².
Within QQQM's tracked universe of 103 assets, XLC comes in at #24 by 3-year correlation. The last year tells two different stories: QQQM led by 24.9 percentage points, +26.4% for QQQM against +1.5% for XLC. Across three years, the rolling one-year figure varied moderately, from 0.65 to 0.90.
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.
QQQM vs XLC: side by side
| QQQM (Invesco Nasdaq 100 ETF) | XLC (Communication Services Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +26.4% | +1.5% |
| 5-year return | +96.1% | +37.5% |
| Volatility (ann.) | 19.5% | 16.0% |
| Beta vs S&P 500 | 1.28 | 0.90 |
| Max drawdown (3Y) | -22.7% | -18.0% |
| Dividend yield | 0.46% | 1.32% |
| Expense ratio | 0.15% | 0.08% |
| Assets under management | $97.1B | $21.7B |
| Sector / category | ETF · US Growth & Tech | Sector ETF |
QQQM is a Large Growth fund from Invesco: $97.1B under management, 105 holdings, a 0.15% expense ratio, a 0.46% trailing dividend yield. On the fund side, XLC sits in the Communications category at State Street Investment Management, with $21.7B under management, 24 holdings, a 0.08% expense ratio, a 1.32% trailing dividend yield.
Portfolio overlap between QQQM and XLC
The two portfolios are largely distinct. Weighing the shared positions, 12.6% of the two funds is identical, spread across 9 common holdings. That shared book is a large part of why the returns line up.
| Common holding | Weight in QQQM | Weight in XLC |
|---|---|---|
| GOOGL | 3.20% | 10.29% |
| GOOG | 2.97% | 8.22% |
| META | 2.74% | 16.73% |
| NFLX | 1.52% | 4.84% |
| TMUS | 0.86% | 4.53% |
| CMCSA | 0.43% | 4.93% |
| APP | 0.42% | 1.30% |
| WBD | 0.32% | 4.65% |
| TTWO | 0.19% | 4.14% |
Largest positions held only by QQQM: NVDA (8.15%), AAPL (7.39%), MSFT (5.93%), MU (4.69%), AMZN (4.50%). Only by XLC: T (5.20%), VZ (4.99%), DIS (4.88%), OMC (4.52%), LYV (4.39%).
Overlap = sum of the smaller of the two weights across common holdings, from issuer disclosures as of 2026-08-26. Top 9 common positions shown.
Year-by-year returns
| Year | QQQM | XLC |
|---|---|---|
| 2022 | -32.5% | -37.6% |
| 2023 | +55.0% | +52.8% |
| 2024 | +25.7% | +34.7% |
| 2025 | +20.9% | +23.1% |
| 2026 | +17.7% | -4.8% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are QQQM and XLC good diversifiers for each other?
Only partially. A correlation of 0.77 means QQQM and XLC 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 QQQM and XLC?
The QQQM/XLC correlation stands at 0.77 on a 3-year window (1 year: 0.67, 5 years: 0.82), computed from weekly returns as of 2026-08-27.
Is XLC a good diversifier for QQQM?
Only partially. A correlation of 0.77 means QQQM and XLC share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
How much do QQQM and XLC overlap?
12.6% by weight, across 9 common holdings, based on issuer-disclosed portfolios as of 2026-08-26.
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Hubs: QQQM correlations · XLC correlations
