VEA vs XLP: Correlation & Overlap
Measured on weekly returns over the past three years, Vanguard FTSE Developed Markets ETF (VEA) and Consumer Staples Select Sector SPDR Fund (XLP) carry a correlation of 0.46, a moderate link. The two funds also share 0.5% of their portfolios by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are VEA and XLP?
On 3 years of weekly data the VEA/XLP correlation comes out at 0.46, moderate. The past 12 months show a weaker link (0.34) than the 3-year average (0.46). The 5-year figure is 0.50, and annualized covariance runs at 78.1 %².
Within VEA's tracked universe of 107 assets, XLP comes in at #90 by 3-year correlation. Their recent paths diverged sharply: over the last 12 months VEA outperformed by 20.2 percentage points (+28.5% for VEA against +8.3% for XLP). On a rolling one-year basis the correlation drifted between 0.35 and 0.67, a moderate band.
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 XLP: side by side
| VEA (Vanguard FTSE Developed Markets ETF) | XLP (Consumer Staples Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +28.5% | +8.3% |
| 5-year return | +63.5% | +34.7% |
| Volatility (ann.) | 15.1% | 11.1% |
| Beta vs S&P 500 | 0.79 | 0.23 |
| Max drawdown (3Y) | -13.5% | -9.7% |
| Dividend yield | 2.56% | 2.58% |
| Expense ratio | 0.03% | 0.08% |
| Assets under management | $314.9B | $14.6B |
| Sector / category | ETF · International | Sector ETF |
VEA is a Foreign Large Blend fund from Vanguard: $314.9B under management, 3769 holdings, a 0.03% expense ratio, a 2.56% trailing dividend yield. On the fund side, XLP sits in the Consumer Defensive category at State Street Investment Management, with $14.6B under management, 35 holdings, a 0.08% expense ratio, a 2.58% trailing dividend yield.
Portfolio overlap between VEA and XLP
The two portfolios are largely distinct: 0.5% of the funds' weight sits in the same underlying holdings (4 common positions). Correlation tells you they move together; overlap tells you why.
Largest positions held only by VEA: 005930 (2.53%), ASML (2.00%), 000660 (1.98%), HSBA (1.15%), ROP (0.97%). Only by XLP: WMT (9.62%), COST (8.92%), KO (7.34%), PG (7.10%), PM (6.36%).
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 | XLP |
|---|---|---|
| 2022 | -15.3% | -0.8% |
| 2023 | +17.9% | -0.8% |
| 2024 | +3.1% | +12.2% |
| 2025 | +35.2% | +1.5% |
| 2026 | +18.3% | +10.9% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are VEA and XLP good diversifiers for each other?
A fair diversifier. At 0.46, enough of each asset's movement is its own that the pair has smoothed outcomes historically.
FAQ
What is the correlation between VEA and XLP?
The VEA/XLP correlation stands at 0.46 on a 3-year window (1 year: 0.34, 5 years: 0.50), computed from weekly returns as of 2026-08-27.
Is XLP a good diversifier for VEA?
A fair diversifier. At 0.46, enough of each asset's movement is its own that the pair has smoothed outcomes historically.
How much do VEA and XLP overlap?
Per the issuers' own portfolio disclosures (2026-07-31), the overlap is 0.5% by weight over 4 common positions.
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Hubs: VEA correlations · XLP correlations
