SCHD vs XLV: Correlation & Overlap
How closely do Schwab US Dividend Equity ETF (SCHD) and Health Care Select Sector SPDR Fund (XLV) trade together? Their weekly returns over three years give a correlation of 0.64, which is strong. Looking through to holdings, 18.0% 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 SCHD and XLV?
Over the past 3 years, SCHD and XLV moved with a correlation of 0.64, which is strong. Lately the two have drifted apart, with the 1-year correlation at 0.50 versus 0.64 over 3 years. Over 5 years the correlation is 0.69, and the annualized covariance of weekly returns is 121.0 %².
By 3-year correlation, XLV places #26 of the 108 assets tracked against SCHD. Twelve-month performance is nearly a tie, at +29.6% for SCHD and +27.5% for XLV. The rolling one-year correlation moved between 0.49 and 0.75 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.
SCHD vs XLV: side by side
| SCHD (Schwab US Dividend Equity ETF) | XLV (Health Care Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +29.6% | +27.5% |
| 5-year return | +60.9% | +37.4% |
| Volatility (ann.) | 12.9% | 14.7% |
| Beta vs S&P 500 | 0.52 | 0.42 |
| Max drawdown (3Y) | -16.1% | -17.1% |
| Dividend yield | 3.13% | 1.56% |
| Expense ratio | 0.06% | 0.08% |
| Assets under management | $104.2B | $41.7B |
| Sector / category | ETF · Dividend | Sector ETF |
SCHD, Schwab ETFs's Large Value fund, carries $104.2B under management, 101 holdings, a 0.06% expense ratio, a 3.13% trailing dividend yield. On the fund side, XLV sits in the Health category at State Street Investment Management, with $41.7B under management, 61 holdings, a 0.08% expense ratio, a 1.56% trailing dividend yield.
Portfolio overlap between SCHD and XLV
The two portfolios partially overlap, with 5 holdings in common adding up to 18.0% of fund weight. Where correlation shows the co-movement, the overlap shows its source.
| Common holding | Weight in SCHD | Weight in XLV |
|---|---|---|
| MRK | 4.92% | 6.04% |
| UNH | 3.92% | 5.82% |
| AMGN | 4.80% | 3.80% |
| ABT | 4.83% | 3.17% |
| BMY | 3.35% | 2.20% |
Largest positions held only by SCHD: KO (4.22%), VZ (3.97%), HD (3.94%), CVX (3.89%), COP (3.86%). Only by XLV: LLY (15.03%), JNJ (10.38%), ABBV (7.42%), TMO (3.76%), GILD (2.94%).
Overlap = sum of the smaller of the two weights across common holdings, from issuer disclosures as of 2026-08-26. Top 5 common positions shown.
Year-by-year returns
| Year | SCHD | XLV |
|---|---|---|
| 2022 | -3.3% | -2.1% |
| 2023 | +4.5% | +2.1% |
| 2024 | +11.7% | +2.5% |
| 2025 | +4.3% | +14.5% |
| 2026 | +29.1% | +11.8% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are SCHD and XLV good diversifiers for each other?
Only partially. A correlation of 0.64 means SCHD and XLV 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 SCHD and XLV?
Using weekly returns as of 2026-08-27: 0.64 over 3 years, with 0.50 over the last year and 0.69 over 5 years.
Is XLV a good diversifier for SCHD?
Only partially. A correlation of 0.64 means SCHD and XLV share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
How much do SCHD and XLV overlap?
18.0% by weight, across 5 common holdings, based on issuer-disclosed portfolios as of 2026-08-26.
Use this data
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