VNQ vs XLU: Correlation & Overlap
Vanguard Real Estate ETF (VNQ) and Utilities Select Sector SPDR Fund (XLU) show a moderate relationship: their 3-year correlation of weekly returns is 0.57. Looking through to holdings, 0% 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 VNQ and XLU?
Across a 3-year window, the weekly returns of VNQ and XLU correlate at 0.57, moderate. Little has changed lately, as the 1-year reading of 0.52 lands near the 3-year figure. Stretching to 5 years gives 0.64, with an annualized covariance of 150.0 %².
Within VNQ's tracked universe of 149 assets, XLU comes in at #97 by 3-year correlation. The trailing year gives VNQ the advantage: +10.3% versus +4.1%, a 6.2-point spread. The rolling one-year correlation moved between 0.43 and 0.70 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.
VNQ vs XLU: side by side
| VNQ (Vanguard Real Estate ETF) | XLU (Utilities Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +10.3% | +4.1% |
| 5-year return | +9.5% | +46.3% |
| Volatility (ann.) | 16.6% | 15.8% |
| Beta vs S&P 500 | 0.59 | 0.26 |
| Max drawdown (3Y) | -17.5% | -13.1% |
| Dividend yield | 3.51% | 2.70% |
| Expense ratio | 0.13% | 0.08% |
| Assets under management | $73.1B | $23.1B |
| Sector / category | ETF · Real Estate | Sector ETF |
VNQ, Vanguard's Real Estate fund, carries $73.1B under management, 140 holdings, a 0.13% expense ratio, a 3.51% 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 VNQ and XLU
The two portfolios are largely distinct, with 0 holdings in common adding up to 0% of fund weight. Where correlation shows the co-movement, the overlap shows its source.
Largest positions held only by VNQ: VRTPX (14.54%), WELL (8.54%), PLD (7.04%), EQIX (5.25%), AMT (4.22%). 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.
Year-by-year returns
| Year | VNQ | XLU |
|---|---|---|
| 2022 | -26.3% | +1.4% |
| 2023 | +11.9% | -7.2% |
| 2024 | +4.8% | +23.3% |
| 2025 | +3.2% | +16.0% |
| 2026 | +12.5% | +2.5% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are VNQ and XLU good diversifiers for each other?
Somewhat, no more. With 0.57 correlation, most large moves hit both names, and the diversification benefit stays modest.
FAQ
What is the correlation between VNQ and XLU?
As of 2026-08-27, the correlation of weekly returns between VNQ and XLU is 0.57 over 3 years, 0.52 over 1 year and 0.64 over 5 years.
Is XLU a good diversifier for VNQ?
Somewhat, no more. With 0.57 correlation, most large moves hit both names, and the diversification benefit stays modest.
How much do VNQ and XLU overlap?
0% by weight, across 0 common holdings, based on issuer-disclosed portfolios as of 2026-07-31.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/vnq-vs-xlu.json
Drop this badge in a README or notebook; it updates with the data:
[](https://www.pairbook.io/pair/vnq-vs-xlu/)
The core API is free. Terms and every endpoint in the API documentation.
Related comparisons
Hubs: VNQ correlations · XLU correlations
