SPY vs XLU: Correlation & Overlap
How closely do SPDR S&P 500 ETF Trust (SPY) and Utilities Select Sector SPDR Fund (XLU) trade together? Their weekly returns over three years give a correlation of 0.24, which is weak. By holdings, the two funds overlap 2.0% by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are SPY and XLU?
On 3 years of weekly data the SPY/XLU correlation comes out at 0.24, weak. The link has loosened recently: the 1-year correlation (-0.10) runs below the 3-year figure (0.24). The 5-year figure is 0.42, and annualized covariance runs at 53.8 %².
Within SPY's tracked universe of 4755 assets, XLU comes in at #2897 by 3-year correlation. Their recent paths diverged sharply: over the last 12 months SPY outperformed by 16.5 percentage points (+20.6% for SPY against +4.1% for XLU). Do not treat this figure as fixed: across three years the rolling one-year correlation ranged all the way from -0.13 to 0.58.
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.
SPY vs XLU: side by side
| SPY (SPDR S&P 500 ETF Trust) | XLU (Utilities Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +20.6% | +4.1% |
| 5-year return | +82.4% | +46.3% |
| Volatility (ann.) | 14.5% | 15.8% |
| Beta vs S&P 500 | 1.00 | 0.26 |
| Max drawdown (3Y) | -18.8% | -13.1% |
| Dividend yield | 1.01% | 2.70% |
| Expense ratio | 0.09% | 0.08% |
| Assets under management | $795.3B | $23.1B |
| Sector / category | ETF · US Large Cap | Sector ETF |
SPY is a Large Blend fund from State Street Investment Management: $795.3B under management, 504 holdings, a 0.09% expense ratio, a 1.01% trailing dividend yield. XLU is an Utilities fund from State Street Investment Management: $23.1B under management, 31 holdings, a 0.08% expense ratio, a 2.70% trailing dividend yield.
Portfolio overlap between SPY and XLU
The two portfolios are largely distinct. Weighing the shared positions, 2.0% of the two funds is identical, spread across 31 common holdings. That shared book is a large part of why the returns line up.
| Common holding | Weight in SPY | Weight in XLU |
|---|---|---|
| NEE | 0.27% | 12.94% |
| SO | 0.15% | 7.45% |
| DUK | 0.14% | 7.00% |
| CEG | 0.14% | 6.58% |
| AEP | 0.10% | 4.94% |
| D | 0.09% | 4.33% |
| SRE | 0.08% | 4.11% |
| ETR | 0.07% | 3.62% |
| XEL | 0.07% | 3.57% |
| EXC | 0.07% | 3.35% |
| VST | 0.07% | 3.27% |
| PCG | 0.06% | 2.96% |
| ED | 0.06% | 2.93% |
| PEG | 0.06% | 2.72% |
| WEC | 0.05% | 2.58% |
Largest positions held only by SPY: NVDA (7.68%), AAPL (6.96%), MSFT (5.58%), AMZN (3.85%), GOOGL (3.03%). Only by XLU: .
Overlap = sum of the smaller of the two weights across common holdings, from issuer disclosures as of 2026-08-26. Top 15 common positions shown.
Year-by-year returns
| Year | SPY | XLU |
|---|---|---|
| 2022 | -18.2% | +1.4% |
| 2023 | +26.2% | -7.2% |
| 2024 | +24.9% | +23.3% |
| 2025 | +17.7% | +16.0% |
| 2026 | +13.7% | +2.5% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are SPY and XLU good diversifiers for each other?
Yes, to a useful degree: a correlation of 0.24 leaves real independence between the two, which historically damped combined volatility.
FAQ
What is the correlation between SPY and XLU?
As of 2026-08-27, the correlation of weekly returns between SPY and XLU is 0.24 over 3 years, -0.10 over 1 year and 0.42 over 5 years.
Is XLU a good diversifier for SPY?
Yes, to a useful degree: a correlation of 0.24 leaves real independence between the two, which historically damped combined volatility.
How much do SPY and XLU overlap?
The two funds share 31 holdings amounting to 2.0% of weight, per issuer portfolio files dated 2026-08-26.
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Hubs: SPY correlations · XLU correlations
