VTI vs XLF: Correlation & Overlap
Measured on weekly returns over the past three years, Vanguard Total Stock Market ETF (VTI) and Financial Select Sector SPDR Fund (XLF) carry a correlation of 0.77, a strong link. Looking through to holdings, 11.0% 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 VTI and XLF?
Over the past 3 years, VTI and XLF moved with a correlation of 0.77, which is strong. The link has loosened recently: the 1-year correlation (0.61) runs below the 3-year figure (0.77). Over 5 years the correlation is 0.81, and the annualized covariance of weekly returns is 181.8 %².
Among the 157 assets we track against VTI, XLF ranks #42 by 3-year correlation. The trailing year gives VTI the advantage: +20.7% versus +9.3%, a 11.4-point spread. The rolling one-year correlation moved between 0.59 and 0.87 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.
VTI vs XLF: side by side
| VTI (Vanguard Total Stock Market ETF) | XLF (Financial Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +20.7% | +9.3% |
| 5-year return | +74.8% | +64.2% |
| Volatility (ann.) | 14.6% | 16.2% |
| Beta vs S&P 500 | 1.01 | 0.84 |
| Max drawdown (3Y) | -19.3% | -15.5% |
| Dividend yield | 1.06% | 1.42% |
| Expense ratio | 0.03% | 0.08% |
| Assets under management | $2,290.0B | $57.9B |
| Sector / category | ETF · US Large Cap | Sector ETF |
VTI, Vanguard's Large Blend fund, carries $2,290.0B under management, 3140 holdings, a 0.03% expense ratio, a 1.06% 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 VTI and XLF
The two portfolios are largely distinct, with 76 holdings in common adding up to 11.0% of fund weight. Where correlation shows the co-movement, the overlap shows its source.
| Common holding | Weight in VTI | Weight in XLF |
|---|---|---|
| JPM | 1.31% | 11.61% |
| BRK.B | 1.28% | 11.25% |
| V | 0.83% | 7.74% |
| MA | 0.63% | 5.87% |
| BAC | 0.55% | 4.94% |
| GS | 0.40% | 3.73% |
| WFC | 0.37% | 3.17% |
| MS | 0.35% | 3.12% |
| C | 0.30% | 2.77% |
| AXP | 0.26% | 2.17% |
| SCHW | 0.24% | 2.17% |
| BLK | 0.21% | 2.06% |
| COF | 0.18% | 1.64% |
| PGR | 0.17% | 1.58% |
| CB | 0.17% | 1.51% |
Largest positions held only by VTI: NVDA (6.42%), AAPL (6.31%), MSFT (4.80%), AMZN (3.66%), GOOGL (2.91%). Only by XLF: 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 | VTI | XLF |
|---|---|---|
| 2022 | -19.5% | -10.6% |
| 2023 | +26.0% | +12.0% |
| 2024 | +23.8% | +30.6% |
| 2025 | +17.1% | +14.9% |
| 2026 | +14.2% | +6.6% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are VTI and XLF good diversifiers for each other?
Only partially. A correlation of 0.77 means VTI 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 VTI and XLF?
As of 2026-08-27, the correlation of weekly returns between VTI and XLF is 0.77 over 3 years, 0.61 over 1 year and 0.81 over 5 years.
Is XLF a good diversifier for VTI?
Only partially. A correlation of 0.77 means VTI and XLF share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
How much do VTI and XLF overlap?
The two funds share 76 holdings amounting to 11.0% of weight, per issuer portfolio files dated 2026-07-31.
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