VOO vs XLC: Correlation & Overlap
Vanguard S&P 500 ETF (VOO) and Communication Services Select Sector SPDR Fund (XLC) show a very strong relationship: their 3-year correlation of weekly returns is 0.82. By holdings, the two funds overlap 9.8% by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are VOO and XLC?
Across a 3-year window, the weekly returns of VOO and XLC correlate at 0.82, very strong, meaning they move nearly in lockstep. Recent behaviour matches the longer record: 0.74 over 1 year against 0.82 over 3. Stretching to 5 years gives 0.83, with an annualized covariance of 187.2 %².
Among the 124 assets we track against VOO, XLC ranks #35 by 3-year correlation. The last year tells two different stories: VOO led by 19.1 percentage points, +20.6% for VOO against +1.5% for XLC. Across three years, the rolling one-year figure varied moderately, from 0.66 to 0.91.
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.
VOO vs XLC: side by side
| VOO (Vanguard S&P 500 ETF) | XLC (Communication Services Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +20.6% | +1.5% |
| 5-year return | +83.0% | +37.5% |
| Volatility (ann.) | 14.4% | 16.0% |
| Beta vs S&P 500 | 0.99 | 0.90 |
| Max drawdown (3Y) | -18.7% | -18.0% |
| Dividend yield | 1.07% | 1.32% |
| Expense ratio | 0.03% | 0.08% |
| Assets under management | $1,686.9B | $21.7B |
| Sector / category | ETF · US Large Cap | Sector ETF |
VOO, Vanguard's Large Blend fund, carries $1,686.9B under management, 503 holdings, a 0.03% expense ratio, a 1.07% trailing dividend yield. On the fund side, XLC sits in the Communications category at State Street Investment Management, with $21.7B under management, 24 holdings, a 0.08% expense ratio, a 1.32% trailing dividend yield.
Portfolio overlap between VOO and XLC
The two portfolios are largely distinct: 9.8% of the funds' weight sits in the same underlying holdings (23 common positions). Correlation tells you they move together; overlap tells you why.
| Common holding | Weight in VOO | Weight in XLC |
|---|---|---|
| GOOGL | 3.25% | 10.29% |
| GOOG | 2.62% | 8.22% |
| META | 1.90% | 16.73% |
| NFLX | 0.47% | 4.84% |
| VZ | 0.30% | 4.99% |
| DIS | 0.26% | 4.88% |
| T | 0.25% | 5.20% |
| APP | 0.17% | 1.30% |
| CMCSA | 0.13% | 4.93% |
| TMUS | 0.12% | 4.53% |
| WBD | 0.10% | 4.65% |
| TTWO | 0.07% | 4.14% |
| LYV | 0.04% | 4.39% |
| OMC | 0.03% | 4.52% |
| CHTR | 0.02% | 3.18% |
Largest positions held only by VOO: NVDA (7.56%), AAPL (7.05%), MSFT (5.37%), AMZN (4.13%), AVGO (2.87%). Only by XLC: RDDT (0.32%).
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 | VOO | XLC |
|---|---|---|
| 2022 | -18.2% | -37.6% |
| 2023 | +26.3% | +52.8% |
| 2024 | +25.0% | +34.7% |
| 2025 | +17.8% | +23.1% |
| 2026 | +13.7% | -4.8% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are VOO and XLC good diversifiers for each other?
No: a correlation of 0.82 means VOO and XLC tend to fall together, which is precisely when diversification is supposed to help.
FAQ
What is the correlation between VOO and XLC?
As of 2026-08-27, the correlation of weekly returns between VOO and XLC is 0.82 over 3 years, 0.74 over 1 year and 0.83 over 5 years.
Is XLC a good diversifier for VOO?
No: a correlation of 0.82 means VOO and XLC tend to fall together, which is precisely when diversification is supposed to help.
How much do VOO and XLC overlap?
9.8% by weight, across 23 common holdings, based on issuer-disclosed portfolios as of 2026-07-31.
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Hubs: VOO correlations · XLC correlations
