USMV vs XLY: Correlation & Overlap
iShares MSCI USA Min Vol Factor ETF (USMV) and Consumer Discretionary Select Sector SPDR Fund (XLY) show a moderate relationship: their 3-year correlation of weekly returns is 0.59. Looking through to holdings, 4.8% 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 XLY?
On 3 years of weekly data the USMV/XLY correlation comes out at 0.59, moderate. The past 12 months show a weaker link (0.46) than the 3-year average (0.59). The 5-year figure is 0.69, and annualized covariance runs at 115.9 %².
Within USMV's tracked universe of 125 assets, XLY comes in at #47 by 3-year correlation. Over the last 12 months USMV came out ahead by 10.2 percentage points (+10.1% against -0.1%). The rolling one-year correlation stayed in a tight band between 0.46 and 0.70 over the past three years, which points to a structural rather than episodic relationship. Note the risk asymmetry: XLY runs 2.0 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 XLY: side by side
| USMV (iShares MSCI USA Min Vol Factor ETF) | XLY (Consumer Discretionary Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +10.1% | -0.1% |
| 5-year return | +42.3% | +31.8% |
| Volatility (ann.) | 9.9% | 19.7% |
| Beta vs S&P 500 | 0.51 | 1.15 |
| Max drawdown (3Y) | -9.4% | -26.0% |
| Dividend yield | 1.48% | 0.78% |
| Expense ratio | 0.15% | 0.08% |
| Assets under management | $23.6B | $22.5B |
| 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. XLY is a Consumer Cyclical fund from State Street Investment Management: $22.5B under management, 47 holdings, a 0.08% expense ratio, a 0.78% trailing dividend yield.
Portfolio overlap between USMV and XLY
The two portfolios are largely distinct, with 8 holdings in common adding up to 4.8% of fund weight. Where correlation shows the co-movement, the overlap shows its source.
| Common holding | Weight in USMV | Weight in XLY |
|---|---|---|
| MCD | 1.06% | 4.11% |
| TJX | 0.94% | 3.55% |
| YUM | 0.89% | 1.06% |
| AZO | 0.72% | 1.23% |
| ORLY | 0.70% | 1.85% |
| DASH | 0.26% | 2.24% |
| AMZN | 0.13% | 24.32% |
| HD | 0.08% | 5.54% |
Largest positions held only by USMV: MSFT (1.68%), NEM (1.65%), VRTX (1.63%), JNJ (1.58%), WELL (1.57%). Only by XLY: TSLA (16.18%), BKNG (4.04%), SBUX (3.08%), LOW (2.94%), ABNB (1.96%).
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 | XLY |
|---|---|---|
| 2022 | -9.4% | -36.3% |
| 2023 | +10.3% | +39.6% |
| 2024 | +15.7% | +26.5% |
| 2025 | +7.6% | +7.4% |
| 2026 | +9.1% | -2.6% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are USMV and XLY good diversifiers for each other?
To a limited degree. At 0.59 the two still catch most of the same waves, so the pair smooths returns a little without insulating either from a shared selloff.
FAQ
What is the correlation between USMV and XLY?
As of 2026-08-27, the correlation of weekly returns between USMV and XLY is 0.59 over 3 years, 0.46 over 1 year and 0.69 over 5 years.
Is XLY a good diversifier for USMV?
To a limited degree. At 0.59 the two still catch most of the same waves, so the pair smooths returns a little without insulating either from a shared selloff.
How much do USMV and XLY overlap?
The two funds share 8 holdings amounting to 4.8% of weight, per issuer portfolio files dated 2026-08-26.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/usmv-vs-xly.json
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Hubs: USMV correlations · XLY correlations
