VIG vs XLF: Correlation & Overlap
How closely do Vanguard Dividend Appreciation ETF (VIG) and Financial Select Sector SPDR Fund (XLF) trade together? Their weekly returns over three years give a correlation of 0.83, which is very strong. The two funds also share 20.6% of their portfolios by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are VIG and XLF?
Over the past 3 years, VIG and XLF moved with a correlation of 0.83, which is very strong, meaning they move nearly in lockstep. The past 12 months show a weaker link (0.70) than the 3-year average (0.83). Over 5 years the correlation is 0.84, and the annualized covariance of weekly returns is 160.3 %².
Among the 106 assets we track against VIG, XLF ranks #18 by 3-year correlation. The trailing year gives VIG the advantage: +17.1% versus +9.3%, a 7.8-point spread. Stability stands out here, with the rolling one-year correlation confined to 0.70 through 0.90.
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 XLF: side by side
| VIG (Vanguard Dividend Appreciation ETF) | XLF (Financial Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +17.1% | +9.3% |
| 5-year return | +64.0% | +64.2% |
| Volatility (ann.) | 11.9% | 16.2% |
| Beta vs S&P 500 | 0.74 | 0.84 |
| Max drawdown (3Y) | -15.0% | -15.5% |
| Dividend yield | 1.50% | 1.42% |
| Expense ratio | 0.04% | 0.08% |
| Assets under management | $130.9B | $57.9B |
| Sector / category | ETF · Dividend | Sector ETF |
VIG, Vanguard's Large Blend fund, carries $130.9B under management, 333 holdings, a 0.04% expense ratio, a 1.50% trailing dividend yield. XLF is a Financial fund from State Street Investment Management: $57.9B under management, 77 holdings, a 0.08% expense ratio, a 1.42% trailing dividend yield.
Portfolio overlap between VIG and XLF
The two portfolios partially overlap: 20.6% of the funds' weight sits in the same underlying holdings (38 common positions). Correlation tells you they move together; overlap tells you why.
| Common holding | Weight in VIG | Weight in XLF |
|---|---|---|
| JPM | 4.09% | 11.61% |
| V | 2.46% | 7.74% |
| MA | 2.01% | 5.87% |
| BAC | 1.75% | 4.94% |
| GS | 1.24% | 3.73% |
| MS | 1.09% | 3.12% |
| BLK | 0.68% | 2.06% |
| CB | 0.55% | 1.51% |
| SPGI | 0.54% | 1.61% |
| BNY | 0.47% | 1.36% |
| CME | 0.42% | 1.24% |
| PNC | 0.42% | 1.19% |
| MRSH | 0.40% | 1.13% |
| ICE | 0.37% | 1.11% |
| TRV | 0.35% | 0.96% |
Largest positions held only by VIG: AVGO (4.65%), AAPL (4.47%), MSFT (4.35%), LLY (3.94%), XOM (2.80%). Only by XLF: BRK.B (11.25%), WFC (3.17%), C (2.77%), AXP (2.17%), SCHW (2.17%).
Overlap = sum of the smaller of the two weights across common holdings, from issuer disclosures as of 2026-07-31. Top 15 common positions shown.
Year-by-year returns
| Year | VIG | XLF |
|---|---|---|
| 2022 | -9.8% | -10.6% |
| 2023 | +14.5% | +12.0% |
| 2024 | +17.0% | +30.6% |
| 2025 | +14.2% | +14.9% |
| 2026 | +11.6% | +6.6% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are VIG and XLF good diversifiers for each other?
No. With a correlation of 0.83, VIG and XLF move nearly in lockstep, so holding both adds very little diversification.
FAQ
What is the correlation between VIG and XLF?
As of 2026-08-27, the correlation of weekly returns between VIG and XLF is 0.83 over 3 years, 0.70 over 1 year and 0.84 over 5 years.
Is XLF a good diversifier for VIG?
No. With a correlation of 0.83, VIG and XLF move nearly in lockstep, so holding both adds very little diversification.
How much do VIG and XLF overlap?
20.6% by weight, across 38 common holdings, based on issuer-disclosed portfolios as of 2026-07-31.
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