VOO vs XLP: Correlation & Overlap
How closely do Vanguard S&P 500 ETF (VOO) and Consumer Staples Select Sector SPDR Fund (XLP) trade together? Their weekly returns over three years give a correlation of 0.30, which is moderate. The two funds also share 4.7% of their portfolios by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are VOO and XLP?
Across a 3-year window, the weekly returns of VOO and XLP correlate at 0.30, moderate. The past 12 months show a weaker link (0.02) than the 3-year average (0.30). Stretching to 5 years gives 0.53, with an annualized covariance of 48.6 %².
Among the 124 assets we track against VOO, XLP ranks #112 by 3-year correlation. On 12-month performance VOO holds a 12.3-point edge, +20.6% against +8.3%. The relationship is regime-dependent: the rolling one-year correlation swung between 0.02 and 0.68 over the past three years, so this pair behaves very differently depending on the market environment.
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 XLP: side by side
| VOO (Vanguard S&P 500 ETF) | XLP (Consumer Staples Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +20.6% | +8.3% |
| 5-year return | +83.0% | +34.7% |
| Volatility (ann.) | 14.4% | 11.1% |
| Beta vs S&P 500 | 0.99 | 0.23 |
| Max drawdown (3Y) | -18.7% | -9.7% |
| Dividend yield | 1.07% | 2.58% |
| Expense ratio | 0.03% | 0.08% |
| Assets under management | $1,686.9B | $14.6B |
| 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, XLP sits in the Consumer Defensive category at State Street Investment Management, with $14.6B under management, 35 holdings, a 0.08% expense ratio, a 2.58% trailing dividend yield.
Portfolio overlap between VOO and XLP
The two portfolios are largely distinct: 4.7% of the funds' weight sits in the same underlying holdings (34 common positions). Correlation tells you they move together; overlap tells you why.
| Common holding | Weight in VOO | Weight in XLP |
|---|---|---|
| WMT | 0.76% | 9.62% |
| COST | 0.66% | 8.92% |
| KO | 0.53% | 7.34% |
| PG | 0.52% | 7.10% |
| PM | 0.46% | 6.36% |
| PEP | 0.30% | 4.39% |
| MO | 0.18% | 4.21% |
| MDLZ | 0.12% | 4.37% |
| CL | 0.11% | 4.56% |
| MNST | 0.11% | 4.28% |
| TGT | 0.10% | 4.67% |
| KDP | 0.07% | 2.75% |
| SYY | 0.06% | 2.50% |
| ADM | 0.06% | 2.42% |
| KVUE | 0.06% | 2.32% |
Largest positions held only by VOO: NVDA (7.56%), AAPL (7.05%), MSFT (5.37%), AMZN (4.13%), GOOGL (3.25%). Only by XLP: IXRU6 (0.00%).
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 | XLP |
|---|---|---|
| 2022 | -18.2% | -0.8% |
| 2023 | +26.3% | -0.8% |
| 2024 | +25.0% | +12.2% |
| 2025 | +17.8% | +1.5% |
| 2026 | +13.7% | +10.9% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are VOO and XLP good diversifiers for each other?
Yes, to a useful degree: a correlation of 0.30 leaves real independence between the two, which historically damped combined volatility.
FAQ
What is the correlation between VOO and XLP?
Using weekly returns as of 2026-08-27: 0.30 over 3 years, with 0.02 over the last year and 0.53 over 5 years.
Is XLP a good diversifier for VOO?
Yes, to a useful degree: a correlation of 0.30 leaves real independence between the two, which historically damped combined volatility.
How much do VOO and XLP overlap?
The two funds share 34 holdings amounting to 4.7% of weight, per issuer portfolio files dated 2026-07-31.
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