USMV vs XLF: Correlation & Overlap
Measured on weekly returns over the past three years, iShares MSCI USA Min Vol Factor ETF (USMV) and Financial Select Sector SPDR Fund (XLF) carry a correlation of 0.77, a strong link. Looking through to holdings, 11.4% 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 XLF?
Across a 3-year window, the weekly returns of USMV and XLF correlate at 0.77, strong. The past 12 months show a weaker link (0.49) than the 3-year average (0.77). Stretching to 5 years gives 0.76, with an annualized covariance of 123.2 %².
By 3-year correlation, XLF places #12 of the 125 assets tracked against USMV. Their 12-month results are close: +10.1% for USMV against +9.3% for XLF. On a rolling one-year basis the correlation drifted between 0.49 and 0.89, a moderate band. Note the risk asymmetry: XLF runs 1.6 times the annualized volatility of the other leg, so equal-weighting the two is not an equal-risk position.
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 XLF: side by side
| USMV (iShares MSCI USA Min Vol Factor ETF) | XLF (Financial Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +10.1% | +9.3% |
| 5-year return | +42.3% | +64.2% |
| Volatility (ann.) | 9.9% | 16.2% |
| Beta vs S&P 500 | 0.51 | 0.84 |
| Max drawdown (3Y) | -9.4% | -15.5% |
| Dividend yield | 1.48% | 1.42% |
| Expense ratio | 0.15% | 0.08% |
| Assets under management | $23.6B | $57.9B |
| 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. XLF is a Financial fund from State Street Investment Management: $57.9B under management, 77 holdings, a 0.08% expense ratio, a 1.42% trailing dividend yield.
Portfolio overlap between USMV and XLF
The two portfolios are largely distinct, with 18 holdings in common adding up to 11.4% of fund weight. Where correlation shows the co-movement, the overlap shows its source.
| Common holding | Weight in USMV | Weight in XLF |
|---|---|---|
| CB | 1.47% | 1.51% |
| BRK.B | 1.41% | 11.25% |
| MA | 1.28% | 5.87% |
| V | 1.02% | 7.74% |
| MRSH | 0.90% | 1.13% |
| CME | 0.86% | 1.24% |
| TRV | 0.79% | 0.96% |
| PGR | 0.70% | 1.58% |
| ALL | 0.57% | 0.82% |
| AON | 0.46% | 0.92% |
| CBOE | 0.98% | 0.40% |
| WTW | 0.39% | 0.39% |
| AJG | 0.35% | 0.83% |
| ICE | 0.27% | 1.11% |
| L | 0.35% | 0.23% |
Largest positions held only by USMV: MSFT (1.68%), NEM (1.65%), VRTX (1.63%), JNJ (1.58%), WELL (1.57%). Only by XLF: JPM (11.61%), BAC (4.94%), GS (3.73%), WFC (3.17%), MS (3.12%).
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 | USMV | XLF |
|---|---|---|
| 2022 | -9.4% | -10.6% |
| 2023 | +10.3% | +12.0% |
| 2024 | +15.7% | +30.6% |
| 2025 | +7.6% | +14.9% |
| 2026 | +9.1% | +6.6% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are USMV and XLF good diversifiers for each other?
Somewhat, no more. With 0.77 correlation, most large moves hit both names, and the diversification benefit stays modest.
FAQ
What is the correlation between USMV and XLF?
Using weekly returns as of 2026-08-27: 0.77 over 3 years, with 0.49 over the last year and 0.76 over 5 years.
Is XLF a good diversifier for USMV?
Somewhat, no more. With 0.77 correlation, most large moves hit both names, and the diversification benefit stays modest.
How much do USMV and XLF overlap?
The two funds share 18 holdings amounting to 11.4% of weight, per issuer portfolio files dated 2026-08-26.
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