QQQM vs XLF: Correlation & Overlap
Invesco Nasdaq 100 ETF (QQQM) and Financial Select Sector SPDR Fund (XLF) show a moderate relationship: their 3-year correlation of weekly returns is 0.56. By holdings, the two funds overlap 0.2% by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are QQQM and XLF?
On 3 years of weekly data the QQQM/XLF correlation comes out at 0.56, moderate. Lately the two have drifted apart, with the 1-year correlation at 0.37 versus 0.56 over 3 years. The 5-year figure is 0.62, and annualized covariance runs at 175.6 %².
Within QQQM's tracked universe of 103 assets, XLF comes in at #70 by 3-year correlation. The last year tells two different stories: QQQM led by 17.1 percentage points, +26.4% for QQQM against +9.3% for XLF. The rolling one-year correlation moved between 0.28 and 0.76 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.
QQQM vs XLF: side by side
| QQQM (Invesco Nasdaq 100 ETF) | XLF (Financial Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +26.4% | +9.3% |
| 5-year return | +96.1% | +64.2% |
| Volatility (ann.) | 19.5% | 16.2% |
| Beta vs S&P 500 | 1.28 | 0.84 |
| Max drawdown (3Y) | -22.7% | -15.5% |
| Dividend yield | 0.46% | 1.42% |
| Expense ratio | 0.15% | 0.08% |
| Assets under management | $97.1B | $57.9B |
| Sector / category | ETF · US Growth & Tech | Sector ETF |
QQQM, Invesco's Large Growth fund, carries $97.1B under management, 105 holdings, a 0.15% expense ratio, a 0.46% trailing dividend yield. 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.
Portfolio overlap between QQQM and XLF
The two portfolios are largely distinct. Weighing the shared positions, 0.2% of the two funds is identical, spread across 1 common holdings. That shared book is a large part of why the returns line up.
| Common holding | Weight in QQQM | Weight in XLF |
|---|---|---|
| PYPL | 0.24% | 0.66% |
Largest positions held only by QQQM: NVDA (8.15%), AAPL (7.39%), MSFT (5.93%), MU (4.69%), AMZN (4.50%). Only by XLF: JPM (11.61%), BRK.B (11.25%), V (7.74%), MA (5.87%), BAC (4.94%).
Overlap = sum of the smaller of the two weights across common holdings, from issuer disclosures as of 2026-08-26. Top 1 common positions shown.
Year-by-year returns
| Year | QQQM | XLF |
|---|---|---|
| 2022 | -32.5% | -10.6% |
| 2023 | +55.0% | +12.0% |
| 2024 | +25.7% | +30.6% |
| 2025 | +20.9% | +14.9% |
| 2026 | +17.7% | +6.6% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are QQQM and XLF good diversifiers for each other?
Somewhat, no more. With 0.56 correlation, most large moves hit both names, and the diversification benefit stays modest.
FAQ
What is the correlation between QQQM and XLF?
The QQQM/XLF correlation stands at 0.56 on a 3-year window (1 year: 0.37, 5 years: 0.62), computed from weekly returns as of 2026-08-27.
Is XLF a good diversifier for QQQM?
Somewhat, no more. With 0.56 correlation, most large moves hit both names, and the diversification benefit stays modest.
How much do QQQM and XLF overlap?
0.2% by weight, across 1 common holdings, based on issuer-disclosed portfolios as of 2026-08-26.
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Hubs: QQQM correlations · XLF correlations
