VIG vs XLB: Correlation & Overlap
Measured on weekly returns over the past three years, Vanguard Dividend Appreciation ETF (VIG) and Materials Select Sector SPDR Fund (XLB) carry a correlation of 0.77, a strong link. Looking through to holdings, 2.8% 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 VIG and XLB?
Over the past 3 years, VIG and XLB moved with a correlation of 0.77, which is strong. The link has loosened recently: the 1-year correlation (0.61) runs below the 3-year figure (0.77). Over 5 years the correlation is 0.81, and the annualized covariance of weekly returns is 152.4 %².
Within VIG's tracked universe of 106 assets, XLB comes in at #23 by 3-year correlation. Twelve-month performance is nearly a tie, at +17.1% for VIG and +17.6% for XLB. Across three years, the rolling one-year figure varied moderately, from 0.62 to 0.88.
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.
VIG vs XLB: side by side
| VIG (Vanguard Dividend Appreciation ETF) | XLB (Materials Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +17.1% | +17.6% |
| 5-year return | +64.0% | +36.9% |
| Volatility (ann.) | 11.9% | 16.7% |
| Beta vs S&P 500 | 0.74 | 0.72 |
| Max drawdown (3Y) | -15.0% | -23.2% |
| Dividend yield | 1.50% | 1.68% |
| Expense ratio | 0.04% | 0.08% |
| Assets under management | $130.9B | $8.3B |
| Sector / category | ETF · Dividend | Sector ETF |
VIG is a Large Blend fund from Vanguard: $130.9B under management, 333 holdings, a 0.04% expense ratio, a 1.50% trailing dividend yield. XLB is a Natural Resources fund from State Street Investment Management: $8.3B under management, 26 holdings, a 0.08% expense ratio, a 1.68% trailing dividend yield.
Portfolio overlap between VIG and XLB
The two portfolios are largely distinct, with 11 holdings in common adding up to 2.8% of fund weight. Where correlation shows the co-movement, the overlap shows its source.
| Common holding | Weight in VIG | Weight in XLB |
|---|---|---|
| LIN | 0.96% | 12.94% |
| SHW | 0.34% | 4.87% |
| ECL | 0.31% | 4.80% |
| APD | 0.28% | 4.71% |
| NUE | 0.25% | 4.28% |
| VMC | 0.15% | 4.26% |
| STLD | 0.15% | 3.73% |
| MLM | 0.14% | 4.09% |
| PPG | 0.11% | 3.32% |
| ALB | 0.06% | 2.07% |
| AVY | 0.06% | 1.82% |
Largest positions held only by VIG: AVGO (4.65%), AAPL (4.47%), MSFT (4.35%), JPM (4.09%), LLY (3.94%). Only by XLB: NEM (8.02%), FCX (6.48%), CTVA (4.72%), CRH (4.12%), SW (3.39%).
Overlap = sum of the smaller of the two weights across common holdings, from issuer disclosures as of 2026-07-31. Top 11 common positions shown.
Year-by-year returns
| Year | VIG | XLB |
|---|---|---|
| 2022 | -9.8% | -12.3% |
| 2023 | +14.5% | +12.5% |
| 2024 | +17.0% | +0.1% |
| 2025 | +14.2% | +9.9% |
| 2026 | +11.6% | +18.3% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are VIG and XLB 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 VIG and XLB?
Using weekly returns as of 2026-08-27: 0.77 over 3 years, with 0.61 over the last year and 0.81 over 5 years.
Is XLB a good diversifier for VIG?
Somewhat, no more. With 0.77 correlation, most large moves hit both names, and the diversification benefit stays modest.
How much do VIG and XLB overlap?
2.8% by weight, across 11 common holdings, based on issuer-disclosed portfolios as of 2026-07-31.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/vig-vs-xlb.json
Embed this badge (it refreshes with the data), with attribution:
[](https://www.pairbook.io/pair/vig-vs-xlb/)
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Related comparisons
Hubs: VIG correlations · XLB correlations
