VIG vs XLU: Correlation & Overlap
Measured on weekly returns over the past three years, Vanguard Dividend Appreciation ETF (VIG) and Utilities Select Sector SPDR Fund (XLU) carry a correlation of 0.38, a moderate link. By holdings, the two funds overlap 2.7% by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are VIG and XLU?
On 3 years of weekly data the VIG/XLU correlation comes out at 0.38, moderate. The past 12 months show a weaker link (0.18) than the 3-year average (0.38). The 5-year figure is 0.54, and annualized covariance runs at 71.2 %².
Within VIG's tracked universe of 106 assets, XLU comes in at #93 by 3-year correlation. Over the last 12 months VIG came out ahead by 13.0 percentage points (+17.1% against +4.1%). The rolling one-year correlation moved between 0.17 and 0.65 over the past three years, a moderate range.
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 XLU: side by side
| VIG (Vanguard Dividend Appreciation ETF) | XLU (Utilities Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +17.1% | +4.1% |
| 5-year return | +64.0% | +46.3% |
| Volatility (ann.) | 11.9% | 15.8% |
| Beta vs S&P 500 | 0.74 | 0.26 |
| Max drawdown (3Y) | -15.0% | -13.1% |
| Dividend yield | 1.50% | 2.70% |
| Expense ratio | 0.04% | 0.08% |
| Assets under management | $130.9B | $23.1B |
| 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. 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 VIG and XLU
The two portfolios are largely distinct. Weighing the shared positions, 2.7% of the two funds is identical, spread across 13 common holdings. That shared book is a large part of why the returns line up.
| Common holding | Weight in VIG | Weight in XLU |
|---|---|---|
| NEE | 0.79% | 12.94% |
| AEP | 0.30% | 4.94% |
| SRE | 0.25% | 4.11% |
| ETR | 0.21% | 3.62% |
| XEL | 0.21% | 3.57% |
| PEG | 0.17% | 2.72% |
| AEE | 0.13% | 2.20% |
| DTE | 0.13% | 2.11% |
| ATO | 0.13% | 2.08% |
| AWK | 0.11% | 1.98% |
| CMS | 0.10% | 1.58% |
| NI | 0.09% | 1.45% |
| LNT | 0.08% | 1.31% |
Largest positions held only by VIG: AVGO (4.65%), AAPL (4.47%), MSFT (4.35%), JPM (4.09%), LLY (3.94%). Only by XLU: SO (7.45%), DUK (7.00%), CEG (6.58%), D (4.33%), EXC (3.35%).
Overlap = sum of the smaller of the two weights across common holdings, from issuer disclosures as of 2026-07-31. Top 13 common positions shown.
Year-by-year returns
| Year | VIG | XLU |
|---|---|---|
| 2022 | -9.8% | +1.4% |
| 2023 | +14.5% | -7.2% |
| 2024 | +17.0% | +23.3% |
| 2025 | +14.2% | +16.0% |
| 2026 | +11.6% | +2.5% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are VIG and XLU good diversifiers for each other?
Reasonably. At 0.38, VIG and XLU keep a meaningful degree of independence, and combining them has historically reduced portfolio volatility.
FAQ
What is the correlation between VIG and XLU?
As of 2026-08-27, the correlation of weekly returns between VIG and XLU is 0.38 over 3 years, 0.18 over 1 year and 0.54 over 5 years.
Is XLU a good diversifier for VIG?
Reasonably. At 0.38, VIG and XLU keep a meaningful degree of independence, and combining them has historically reduced portfolio volatility.
How much do VIG and XLU overlap?
Per the issuers' own portfolio disclosures (2026-07-31), the overlap is 2.7% by weight over 13 common positions.
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Hubs: VIG correlations · XLU correlations
