SCHD vs XLP: Correlation & Overlap
How closely do Schwab US Dividend Equity ETF (SCHD) and Consumer Staples Select Sector SPDR Fund (XLP) trade together? Their weekly returns over three years give a correlation of 0.62, which is strong. The two funds also share 19.3% of their portfolios by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are SCHD and XLP?
On 3 years of weekly data the SCHD/XLP correlation comes out at 0.62, strong. Recent behaviour matches the longer record: 0.68 over 1 year against 0.62 over 3. The 5-year figure is 0.70, and annualized covariance runs at 88.7 %².
Among the 108 assets we track against SCHD, XLP ranks #34 by 3-year correlation. Correlation aside, the last 12 months split them widely, with SCHD ahead by 21.3 points (+29.6% versus +8.3%). On a rolling one-year basis the correlation drifted between 0.49 and 0.76, a moderate band.
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.
SCHD vs XLP: side by side
| SCHD (Schwab US Dividend Equity ETF) | XLP (Consumer Staples Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +29.6% | +8.3% |
| 5-year return | +60.9% | +34.7% |
| Volatility (ann.) | 12.9% | 11.1% |
| Beta vs S&P 500 | 0.52 | 0.23 |
| Max drawdown (3Y) | -16.1% | -9.7% |
| Dividend yield | 3.13% | 2.58% |
| Expense ratio | 0.06% | 0.08% |
| Assets under management | $104.2B | $14.6B |
| Sector / category | ETF · Dividend | Sector ETF |
SCHD is a Large Value fund from Schwab ETFs: $104.2B under management, 101 holdings, a 0.06% expense ratio, a 3.13% trailing dividend yield. On the fund side, XLP sits in the Consumer Defensive category at State Street Investment Management, with $14.6B under management, 35 holdings, a 0.08% expense ratio, a 2.58% trailing dividend yield.
Portfolio overlap between SCHD and XLP
The two portfolios partially overlap: 19.3% of the funds' weight sits in the same underlying holdings (9 common positions). Correlation tells you they move together; overlap tells you why.
| Common holding | Weight in SCHD | Weight in XLP |
|---|---|---|
| KO | 4.22% | 7.34% |
| PG | 3.81% | 7.10% |
| PEP | 3.68% | 4.39% |
| MO | 2.80% | 4.21% |
| TGT | 1.81% | 4.67% |
| ADM | 0.94% | 2.42% |
| KMB | 0.89% | 2.30% |
| HSY | 0.67% | 1.72% |
| GIS | 0.52% | 1.34% |
Largest positions held only by SCHD: MRK (4.92%), ABT (4.83%), AMGN (4.80%), VZ (3.97%), HD (3.94%). Only by XLP: WMT (9.62%), COST (8.92%), PM (6.36%), CL (4.56%), MDLZ (4.37%).
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 | SCHD | XLP |
|---|---|---|
| 2022 | -3.3% | -0.8% |
| 2023 | +4.5% | -0.8% |
| 2024 | +11.7% | +12.2% |
| 2025 | +4.3% | +1.5% |
| 2026 | +29.1% | +10.9% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are SCHD and XLP good diversifiers for each other?
Somewhat, no more. With 0.62 correlation, most large moves hit both names, and the diversification benefit stays modest.
FAQ
What is the correlation between SCHD and XLP?
Using weekly returns as of 2026-08-27: 0.62 over 3 years, with 0.68 over the last year and 0.70 over 5 years.
Is XLP a good diversifier for SCHD?
Somewhat, no more. With 0.62 correlation, most large moves hit both names, and the diversification benefit stays modest.
How much do SCHD and XLP overlap?
19.3% by weight, across 9 common holdings, based on issuer-disclosed portfolios as of 2026-08-26.
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