VEA vs XLU: Correlation & Overlap
Vanguard FTSE Developed Markets ETF (VEA) and Utilities Select Sector SPDR Fund (XLU) show a moderate relationship: their 3-year correlation of weekly returns is 0.36. The two funds also share 0.4% of their portfolios by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are VEA and XLU?
Over the past 3 years, VEA and XLU moved with a correlation of 0.36, which is moderate. Lately the two have drifted apart, with the 1-year correlation at 0.17 versus 0.36 over 3 years. Over 5 years the correlation is 0.41, and the annualized covariance of weekly returns is 84.9 %².
Among the 107 assets we track against VEA, XLU ranks #95 by 3-year correlation. The last year tells two different stories: VEA led by 24.4 percentage points, +28.5% for VEA against +4.1% for XLU. On a rolling one-year basis the correlation drifted between 0.18 and 0.61, 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 XLU: side by side
| VEA (Vanguard FTSE Developed Markets ETF) | XLU (Utilities Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +28.5% | +4.1% |
| 5-year return | +63.5% | +46.3% |
| Volatility (ann.) | 15.1% | 15.8% |
| Beta vs S&P 500 | 0.79 | 0.26 |
| Max drawdown (3Y) | -13.5% | -13.1% |
| Dividend yield | 2.56% | 2.70% |
| Expense ratio | 0.03% | 0.08% |
| Assets under management | $314.9B | $23.1B |
| Sector / category | ETF · International | Sector ETF |
VEA, Vanguard's Foreign Large Blend fund, carries $314.9B under management, 3769 holdings, a 0.03% expense ratio, a 2.56% trailing dividend yield. XLU is an Utilities fund from State Street Investment Management: $23.1B under management, 31 holdings, a 0.08% expense ratio, a 2.70% trailing dividend yield.
Portfolio overlap between VEA and XLU
The two portfolios are largely distinct, with 3 holdings in common adding up to 0.4% 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 XLU: NEE (12.94%), SO (7.45%), DUK (7.00%), CEG (6.58%), AEP (4.94%).
Overlap = sum of the smaller of the two weights across common holdings, from issuer disclosures as of 2026-07-31. Top 3 common positions shown.
Year-by-year returns
| Year | VEA | XLU |
|---|---|---|
| 2022 | -15.3% | +1.4% |
| 2023 | +17.9% | -7.2% |
| 2024 | +3.1% | +23.3% |
| 2025 | +35.2% | +16.0% |
| 2026 | +18.3% | +2.5% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are VEA and XLU good diversifiers for each other?
A fair diversifier. At 0.36, enough of each asset's movement is its own that the pair has smoothed outcomes historically.
FAQ
What is the correlation between VEA and XLU?
Using weekly returns as of 2026-08-27: 0.36 over 3 years, with 0.17 over the last year and 0.41 over 5 years.
Is XLU a good diversifier for VEA?
A fair diversifier. At 0.36, enough of each asset's movement is its own that the pair has smoothed outcomes historically.
How much do VEA and XLU overlap?
The two funds share 3 holdings amounting to 0.4% of weight, per issuer portfolio files dated 2026-07-31.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/vea-vs-xlu.json
Drop this badge in a README or notebook; it updates with the data:
[](https://www.pairbook.io/pair/vea-vs-xlu/)
The core API is free. Terms and every endpoint in the API documentation.
Related comparisons
Hubs: VEA correlations · XLU correlations
