USMV vs XLC: Correlation & Overlap
How closely do iShares MSCI USA Min Vol Factor ETF (USMV) and Communication Services Select Sector SPDR Fund (XLC) trade together? Their weekly returns over three years give a correlation of 0.64, which is strong. Looking through to holdings, 4.5% 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 USMV and XLC?
Over the past 3 years, USMV and XLC moved with a correlation of 0.64, which is strong. The past 12 months show a weaker link (0.48) than the 3-year average (0.64). Over 5 years the correlation is 0.67, and the annualized covariance of weekly returns is 100.8 %².
Among the 125 assets we track against USMV, XLC ranks #33 by 3-year correlation. On 12-month performance USMV holds a 8.6-point edge, +10.1% against +1.5%. Across three years, the rolling one-year figure varied moderately, from 0.38 to 0.78. One caveat on sizing: XLC is 1.6 times as volatile as the other leg, so an equal-dollar split is far from equal-risk.
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.
USMV vs XLC: side by side
| USMV (iShares MSCI USA Min Vol Factor ETF) | XLC (Communication Services Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +10.1% | +1.5% |
| 5-year return | +42.3% | +37.5% |
| Volatility (ann.) | 9.9% | 16.0% |
| Beta vs S&P 500 | 0.51 | 0.90 |
| Max drawdown (3Y) | -9.4% | -18.0% |
| Dividend yield | 1.48% | 1.32% |
| Expense ratio | 0.15% | 0.08% |
| Assets under management | $23.6B | $21.7B |
| Sector / category | ETF · US Style | Sector ETF |
USMV, iShares's Large Blend fund, carries $23.6B under management, 164 holdings, a 0.15% expense ratio, a 1.48% 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 USMV and XLC
The two portfolios are largely distinct: 4.5% of the funds' weight sits in the same underlying holdings (8 common positions). Correlation tells you they move together; overlap tells you why.
| Common holding | Weight in USMV | Weight in XLC |
|---|---|---|
| VZ | 1.46% | 4.99% |
| TMUS | 1.00% | 4.53% |
| T | 0.92% | 5.20% |
| GOOG | 0.38% | 8.22% |
| APP | 0.26% | 1.30% |
| NFLX | 0.19% | 4.84% |
| TTWO | 0.17% | 4.14% |
| META | 0.08% | 16.73% |
Largest positions held only by USMV: MSFT (1.68%), NEM (1.65%), VRTX (1.63%), JNJ (1.58%), WELL (1.57%). Only by XLC: GOOGL (10.29%), CMCSA (4.93%), DIS (4.88%), WBD (4.65%), OMC (4.52%).
Overlap = sum of the smaller of the two weights across common holdings, from issuer disclosures as of 2026-08-26. Top 8 common positions shown.
Year-by-year returns
| Year | USMV | XLC |
|---|---|---|
| 2022 | -9.4% | -37.6% |
| 2023 | +10.3% | +52.8% |
| 2024 | +15.7% | +34.7% |
| 2025 | +7.6% | +23.1% |
| 2026 | +9.1% | -4.8% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are USMV and XLC good diversifiers for each other?
Somewhat, no more. With 0.64 correlation, most large moves hit both names, and the diversification benefit stays modest.
FAQ
What is the correlation between USMV and XLC?
As of 2026-08-27, the correlation of weekly returns between USMV and XLC is 0.64 over 3 years, 0.48 over 1 year and 0.67 over 5 years.
Is XLC a good diversifier for USMV?
Somewhat, no more. With 0.64 correlation, most large moves hit both names, and the diversification benefit stays modest.
How much do USMV and XLC overlap?
The two funds share 8 holdings amounting to 4.5% of weight, per issuer portfolio files dated 2026-08-26.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/usmv-vs-xlc.json
Markdown for the live badge, attribution link included:
[](https://www.pairbook.io/pair/usmv-vs-xlc/)
The core API is free. Terms and every endpoint in the API documentation.
Related comparisons
Hubs: USMV correlations · XLC correlations
