VEA vs XLC: Correlation & Overlap
How closely do Vanguard FTSE Developed Markets ETF (VEA) and Communication Services Select Sector SPDR Fund (XLC) trade together? Their weekly returns over three years give a correlation of 0.62, which is strong. The two funds also share 0.0% of their portfolios by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are VEA and XLC?
Across a 3-year window, the weekly returns of VEA and XLC correlate at 0.62, strong. Lately the two have drifted apart, with the 1-year correlation at 0.50 versus 0.62 over 3 years. Stretching to 5 years gives 0.66, with an annualized covariance of 148.9 %².
Among the 107 assets we track against VEA, XLC ranks #59 by 3-year correlation. Correlation aside, the last 12 months split them widely, with VEA ahead by 27.0 points (+28.5% versus +1.5%). Across three years, the rolling one-year figure varied moderately, from 0.49 to 0.76.
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.
VEA vs XLC: side by side
| VEA (Vanguard FTSE Developed Markets ETF) | XLC (Communication Services Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +28.5% | +1.5% |
| 5-year return | +63.5% | +37.5% |
| Volatility (ann.) | 15.1% | 16.0% |
| Beta vs S&P 500 | 0.79 | 0.90 |
| Max drawdown (3Y) | -13.5% | -18.0% |
| Dividend yield | 2.56% | 1.32% |
| Expense ratio | 0.03% | 0.08% |
| Assets under management | $314.9B | $21.7B |
| Sector / category | ETF · International | Sector ETF |
On the fund side, VEA sits in the Foreign Large Blend category at Vanguard, with $314.9B under management, 3769 holdings, a 0.03% expense ratio, a 2.56% 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 VEA and XLC
The two portfolios are largely distinct, with 4 holdings in common adding up to 0.0% of fund weight. Where correlation shows the co-movement, the overlap shows its source.
Largest positions held only by VEA: 005930 (2.53%), ASML (2.00%), 000660 (1.98%), HSBA (1.15%), ROP (0.97%). Only by XLC: META (16.73%), GOOGL (10.29%), GOOG (8.22%), VZ (4.99%), CMCSA (4.93%).
Overlap = sum of the smaller of the two weights across common holdings, from issuer disclosures as of 2026-07-31. Top 4 common positions shown.
Year-by-year returns
| Year | VEA | XLC |
|---|---|---|
| 2022 | -15.3% | -37.6% |
| 2023 | +17.9% | +52.8% |
| 2024 | +3.1% | +34.7% |
| 2025 | +35.2% | +23.1% |
| 2026 | +18.3% | -4.8% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are VEA and XLC good diversifiers for each other?
To a limited degree. At 0.62 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 VEA and XLC?
As of 2026-08-27, the correlation of weekly returns between VEA and XLC is 0.62 over 3 years, 0.50 over 1 year and 0.66 over 5 years.
Is XLC a good diversifier for VEA?
To a limited degree. At 0.62 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 VEA and XLC overlap?
Per the issuers' own portfolio disclosures (2026-07-31), the overlap is 0.0% by weight over 4 common positions.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/vea-vs-xlc.json
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Related comparisons
Hubs: VEA correlations · XLC correlations
