VTV vs XLF: Correlation & Overlap
How closely do Vanguard Value ETF (VTV) and Financial Select Sector SPDR Fund (XLF) trade together? Their weekly returns over three years give a correlation of 0.85, which is very strong. Looking through to holdings, 23.4% 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 VTV and XLF?
Over the past 3 years, VTV and XLF moved with a correlation of 0.85, which is very strong, meaning they move nearly in lockstep. The link has loosened recently: the 1-year correlation (0.62) runs below the 3-year figure (0.85). Over 5 years the correlation is 0.89, and the annualized covariance of weekly returns is 163.9 %².
Among the 149 assets we track against VTV, XLF ranks #14 by 3-year correlation. Their recent paths diverged sharply: over the last 12 months VTV outperformed by 16.4 percentage points (+25.7% for VTV against +9.3% for XLF). The rolling one-year correlation moved between 0.62 and 0.96 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.
VTV vs XLF: side by side
| VTV (Vanguard Value ETF) | XLF (Financial Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +25.7% | +9.3% |
| 5-year return | +79.1% | +64.2% |
| Volatility (ann.) | 11.9% | 16.2% |
| Beta vs S&P 500 | 0.65 | 0.84 |
| Max drawdown (3Y) | -14.5% | -15.5% |
| Dividend yield | 1.86% | 1.42% |
| Expense ratio | 0.03% | 0.08% |
| Assets under management | $256.4B | $57.9B |
| Sector / category | ETF · US Style | Sector ETF |
VTV, Vanguard's Large Value fund, carries $256.4B under management, 308 holdings, a 0.03% expense ratio, a 1.86% 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 VTV and XLF
The two portfolios partially overlap, with 60 holdings in common adding up to 23.4% of fund weight. Where correlation shows the co-movement, the overlap shows its source.
| Common holding | Weight in VTV | Weight in XLF |
|---|---|---|
| JPM | 3.51% | 11.61% |
| BRK.B | 2.99% | 11.25% |
| BAC | 1.47% | 4.94% |
| GS | 1.06% | 3.73% |
| WFC | 0.99% | 3.17% |
| MS | 0.93% | 3.12% |
| C | 0.82% | 2.77% |
| AXP | 0.68% | 2.17% |
| SCHW | 0.65% | 2.17% |
| BLK | 0.57% | 2.06% |
| COF | 0.48% | 1.64% |
| PGR | 0.46% | 1.58% |
| CB | 0.46% | 1.51% |
| SPGI | 0.44% | 1.61% |
| BNY | 0.40% | 1.36% |
Largest positions held only by VTV: MU (3.46%), XOM (2.40%), JNJ (2.30%), WMT (1.82%), ABBV (1.65%). Only by XLF: V (7.74%), MA (5.87%), HOOD (1.04%), MCO (0.94%), XYZ (0.54%).
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 | VTV | XLF |
|---|---|---|
| 2022 | -2.1% | -10.6% |
| 2023 | +9.3% | +12.0% |
| 2024 | +16.0% | +30.6% |
| 2025 | +15.3% | +14.9% |
| 2026 | +19.3% | +6.6% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are VTV and XLF good diversifiers for each other?
No. With a correlation of 0.85, VTV and XLF move nearly in lockstep, so holding both adds very little diversification.
FAQ
What is the correlation between VTV and XLF?
Using weekly returns as of 2026-08-27: 0.85 over 3 years, with 0.62 over the last year and 0.89 over 5 years.
Is XLF a good diversifier for VTV?
No. With a correlation of 0.85, VTV and XLF move nearly in lockstep, so holding both adds very little diversification.
How much do VTV and XLF overlap?
The two funds share 60 holdings amounting to 23.4% of weight, per issuer portfolio files dated 2026-07-31.
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Hubs: VTV correlations · XLF correlations
