USMV vs XLE: Correlation & Overlap
Measured on weekly returns over the past three years, iShares MSCI USA Min Vol Factor ETF (USMV) and Energy Select Sector SPDR Fund (XLE) carry a correlation of 0.27, a weak link. The two funds also share 2.6% of their portfolios by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are USMV and XLE?
Over the past 3 years, USMV and XLE moved with a correlation of 0.27, which is weak. The past 12 months show a weaker link (-0.09) than the 3-year average (0.27). Over 5 years the correlation is 0.29, and the annualized covariance of weekly returns is 62.5 %².
By 3-year correlation, XLE places #115 of the 125 assets tracked against USMV. Correlation aside, the last 12 months split them widely, with XLE ahead by 33.9 points (+10.1% versus +44.0%). The relationship is regime-dependent: the rolling one-year correlation swung between -0.09 and 0.55 over the past three years, so this pair behaves very differently depending on the market environment. Risk is not evenly split, since XLE carries 2.3 times the volatility of the other side.
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 XLE: side by side
| USMV (iShares MSCI USA Min Vol Factor ETF) | XLE (Energy Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +10.1% | +44.0% |
| 5-year return | +42.3% | +206.7% |
| Volatility (ann.) | 9.9% | 23.1% |
| Beta vs S&P 500 | 0.51 | 0.27 |
| Max drawdown (3Y) | -9.4% | -20.1% |
| Dividend yield | 1.48% | 2.55% |
| Expense ratio | 0.15% | 0.08% |
| Assets under management | $23.6B | $39.2B |
| Sector / category | ETF · US Style | Sector ETF |
On the fund side, USMV sits in the Large Blend category at iShares, with $23.6B under management, 164 holdings, a 0.15% expense ratio, a 1.48% trailing dividend yield. XLE is an Equity Energy fund from State Street Investment Management: $39.2B under management, 22 holdings, a 0.08% expense ratio, a 2.55% trailing dividend yield.
Portfolio overlap between USMV and XLE
The two portfolios are largely distinct, with 5 holdings in common adding up to 2.6% of fund weight. Where correlation shows the co-movement, the overlap shows its source.
| Common holding | Weight in USMV | Weight in XLE |
|---|---|---|
| XOM | 1.38% | 20.03% |
| WMB | 0.45% | 3.84% |
| CVX | 0.39% | 14.84% |
| EXE | 0.25% | 1.37% |
| EOG | 0.17% | 4.24% |
Largest positions held only by USMV: MSFT (1.68%), NEM (1.65%), VRTX (1.63%), JNJ (1.58%), WELL (1.57%). Only by XLE: COP (6.30%), MPC (5.40%), PSX (5.37%), VLO (5.05%), SLB (4.46%).
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 | USMV | XLE |
|---|---|---|
| 2022 | -9.4% | +64.3% |
| 2023 | +10.3% | -0.6% |
| 2024 | +15.7% | +5.6% |
| 2025 | +7.6% | +7.9% |
| 2026 | +9.1% | +41.2% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are USMV and XLE good diversifiers for each other?
Reasonably. At 0.27, USMV and XLE keep a meaningful degree of independence, and combining them has historically reduced portfolio volatility.
FAQ
What is the correlation between USMV and XLE?
The USMV/XLE correlation stands at 0.27 on a 3-year window (1 year: -0.09, 5 years: 0.29), computed from weekly returns as of 2026-08-27.
Is XLE a good diversifier for USMV?
Reasonably. At 0.27, USMV and XLE keep a meaningful degree of independence, and combining them has historically reduced portfolio volatility.
How much do USMV and XLE overlap?
2.6% by weight, across 5 common holdings, based on issuer-disclosed portfolios as of 2026-08-26.
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Hubs: USMV correlations · XLE correlations
