VT vs XLF: Correlation & Overlap
Measured on weekly returns over the past three years, Vanguard Total World Stock ETF (VT) and Financial Select Sector SPDR Fund (XLF) carry a correlation of 0.73, a strong link. Looking through to holdings, 7.2% 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 VT and XLF?
Across a 3-year window, the weekly returns of VT and XLF correlate at 0.73, strong. Lately the two have drifted apart, with the 1-year correlation at 0.54 versus 0.73 over 3 years. Stretching to 5 years gives 0.79, with an annualized covariance of 164.1 %².
By 3-year correlation, XLF places #56 of the 136 assets tracked against VT. On 12-month performance VT holds a 13.4-point edge, +22.7% against +9.3%. Across three years, the rolling one-year figure varied moderately, from 0.53 to 0.87.
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.
VT vs XLF: side by side
| VT (Vanguard Total World Stock ETF) | XLF (Financial Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +22.7% | +9.3% |
| 5-year return | +67.7% | +64.2% |
| Volatility (ann.) | 13.9% | 16.2% |
| Beta vs S&P 500 | 0.92 | 0.84 |
| Max drawdown (3Y) | -16.5% | -15.5% |
| Dividend yield | 1.59% | 1.42% |
| Expense ratio | 0.06% | 0.08% |
| Assets under management | $97.9B | $57.9B |
| Sector / category | ETF · Global | Sector ETF |
VT is a Global Large-Stock Blend fund from Vanguard: $97.9B under management, 5308 holdings, a 0.06% expense ratio, a 1.59% trailing dividend yield. XLF is a Financial fund from State Street Investment Management: $57.9B under management, 77 holdings, a 0.08% expense ratio, a 1.42% trailing dividend yield.
Portfolio overlap between VT and XLF
The two portfolios are largely distinct: 7.2% of the funds' weight sits in the same underlying holdings (75 common positions). Correlation tells you they move together; overlap tells you why.
| Common holding | Weight in VT | Weight in XLF |
|---|---|---|
| JPM | 0.84% | 11.61% |
| BRK.B | 0.75% | 11.25% |
| V | 0.54% | 7.74% |
| MA | 0.41% | 5.87% |
| BAC | 0.36% | 4.94% |
| GS | 0.25% | 3.73% |
| WFC | 0.24% | 3.17% |
| MS | 0.21% | 3.12% |
| C | 0.19% | 2.77% |
| AXP | 0.16% | 2.17% |
| SCHW | 0.15% | 2.17% |
| BLK | 0.15% | 2.06% |
| COF | 0.12% | 1.64% |
| CB | 0.11% | 1.51% |
| PGR | 0.11% | 1.58% |
Largest positions held only by VT: NVDA (4.20%), AAPL (4.00%), MSFT (3.09%), AMZN (2.36%), GOOGL (1.89%). Only by XLF: ERIE (0.08%), IXAU6 (0.01%).
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 | VT | XLF |
|---|---|---|
| 2022 | -18.0% | -10.6% |
| 2023 | +22.0% | +12.0% |
| 2024 | +16.5% | +30.6% |
| 2025 | +22.4% | +14.9% |
| 2026 | +15.2% | +6.6% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are VT and XLF good diversifiers for each other?
Only partially. A correlation of 0.73 means VT and XLF share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
FAQ
What is the correlation between VT and XLF?
As of 2026-08-27, the correlation of weekly returns between VT and XLF is 0.73 over 3 years, 0.54 over 1 year and 0.79 over 5 years.
Is XLF a good diversifier for VT?
Only partially. A correlation of 0.73 means VT and XLF share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
How much do VT and XLF overlap?
The two funds share 75 holdings amounting to 7.2% of weight, per issuer portfolio files dated 2026-07-31.
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