VOO vs XLU: Correlation & Overlap
Measured on weekly returns over the past three years, Vanguard S&P 500 ETF (VOO) and Utilities Select Sector SPDR Fund (XLU) carry a correlation of 0.23, a weak link. Looking through to holdings, 2.2% 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 VOO and XLU?
Over the past 3 years, VOO and XLU moved with a correlation of 0.23, which is weak. Lately the two have drifted apart, with the 1-year correlation at -0.10 versus 0.23 over 3 years. Over 5 years the correlation is 0.42, and the annualized covariance of weekly returns is 53.3 %².
By 3-year correlation, XLU places #113 of the 124 assets tracked against VOO. Their recent paths diverged sharply: over the last 12 months VOO outperformed by 16.5 percentage points (+20.6% for VOO against +4.1% for XLU). The relationship is regime-dependent: the rolling one-year correlation swung between -0.13 and 0.57 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 XLU: side by side
| VOO (Vanguard S&P 500 ETF) | XLU (Utilities Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +20.6% | +4.1% |
| 5-year return | +83.0% | +46.3% |
| Volatility (ann.) | 14.4% | 15.8% |
| Beta vs S&P 500 | 0.99 | 0.26 |
| Max drawdown (3Y) | -18.7% | -13.1% |
| Dividend yield | 1.07% | 2.70% |
| Expense ratio | 0.03% | 0.08% |
| Assets under management | $1,686.9B | $23.1B |
| Sector / category | ETF · US Large Cap | Sector ETF |
On the fund side, VOO sits in the Large Blend category at Vanguard, with $1,686.9B under management, 503 holdings, a 0.03% expense ratio, a 1.07% 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 VOO and XLU
The two portfolios are largely distinct: 2.2% of the funds' weight sits in the same underlying holdings (31 common positions). Correlation tells you they move together; overlap tells you why.
| Common holding | Weight in VOO | Weight in XLU |
|---|---|---|
| NEE | 0.28% | 12.94% |
| SO | 0.17% | 7.45% |
| DUK | 0.15% | 7.00% |
| CEG | 0.13% | 6.58% |
| AEP | 0.11% | 4.94% |
| D | 0.09% | 4.33% |
| SRE | 0.09% | 4.11% |
| ETR | 0.08% | 3.62% |
| XEL | 0.08% | 3.57% |
| VST | 0.07% | 3.27% |
| EXC | 0.07% | 3.35% |
| ED | 0.06% | 2.93% |
| PCG | 0.06% | 2.96% |
| PEG | 0.06% | 2.72% |
| WEC | 0.06% | 2.58% |
Largest positions held only by VOO: NVDA (7.56%), AAPL (7.05%), MSFT (5.37%), AMZN (4.13%), GOOGL (3.25%). Only by XLU: .
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 | XLU |
|---|---|---|
| 2022 | -18.2% | +1.4% |
| 2023 | +26.3% | -7.2% |
| 2024 | +25.0% | +23.3% |
| 2025 | +17.8% | +16.0% |
| 2026 | +13.7% | +2.5% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are VOO and XLU good diversifiers for each other?
Reasonably. At 0.23, VOO and XLU keep a meaningful degree of independence, and combining them has historically reduced portfolio volatility.
FAQ
What is the correlation between VOO and XLU?
Using weekly returns as of 2026-08-27: 0.23 over 3 years, with -0.10 over the last year and 0.42 over 5 years.
Is XLU a good diversifier for VOO?
Reasonably. At 0.23, VOO and XLU keep a meaningful degree of independence, and combining them has historically reduced portfolio volatility.
How much do VOO and XLU overlap?
The two funds share 31 holdings amounting to 2.2% of weight, per issuer portfolio files dated 2026-07-31.
Use this data
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[](https://www.pairbook.io/pair/voo-vs-xlu/)
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Hubs: VOO correlations · XLU correlations
