VUG vs XLB: Correlation & Overlap
Measured on weekly returns over the past three years, Vanguard Growth ETF (VUG) and Materials Select Sector SPDR Fund (XLB) carry a correlation of 0.43, a moderate link. By holdings, the two funds overlap 0.5% by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are VUG and XLB?
Across a 3-year window, the weekly returns of VUG and XLB correlate at 0.43, moderate. Lately the two have drifted apart, with the 1-year correlation at 0.12 versus 0.43 over 3 years. Stretching to 5 years gives 0.60, with an annualized covariance of 138.9 %².
Within VUG's tracked universe of 103 assets, XLB comes in at #79 by 3-year correlation. Twelve-month performance is nearly a tie, at +16.2% for VUG and +17.6% for XLB. This link changes with the market regime, having swung between 0.13 and 0.75 on a rolling one-year basis.
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.
VUG vs XLB: side by side
| VUG (Vanguard Growth ETF) | XLB (Materials Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +16.2% | +17.6% |
| 5-year return | +78.4% | +36.9% |
| Volatility (ann.) | 19.4% | 16.7% |
| Beta vs S&P 500 | 1.28 | 0.72 |
| Max drawdown (3Y) | -22.8% | -23.2% |
| Dividend yield | 0.40% | 1.68% |
| Expense ratio | 0.03% | 0.08% |
| Assets under management | $372.0B | $8.3B |
| Sector / category | ETF · US Style | Sector ETF |
On the fund side, VUG sits in the Large Growth category at Vanguard, with $372.0B under management, 146 holdings, a 0.03% expense ratio, a 0.40% trailing dividend yield. XLB is a Natural Resources fund from State Street Investment Management: $8.3B under management, 26 holdings, a 0.08% expense ratio, a 1.68% trailing dividend yield.
Portfolio overlap between VUG and XLB
The two portfolios are largely distinct, with 4 holdings in common adding up to 0.5% of fund weight. Where correlation shows the co-movement, the overlap shows its source.
Largest positions held only by VUG: NVDA (12.84%), AAPL (12.63%), MSFT (9.61%), GOOGL (5.81%), AMZN (5.16%). Only by XLB: LIN (12.94%), NEM (8.02%), FCX (6.48%), CTVA (4.72%), APD (4.71%).
Overlap = sum of the smaller of the two weights across common holdings, from issuer disclosures as of 2026-07-31. Top 4 common positions shown.
Year-by-year returns
| Year | VUG | XLB |
|---|---|---|
| 2022 | -33.2% | -12.3% |
| 2023 | +46.8% | +12.5% |
| 2024 | +32.7% | +0.1% |
| 2025 | +19.4% | +9.9% |
| 2026 | +9.6% | +18.3% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are VUG and XLB good diversifiers for each other?
Yes, to a useful degree: a correlation of 0.43 leaves real independence between the two, which historically damped combined volatility.
FAQ
What is the correlation between VUG and XLB?
As of 2026-08-27, the correlation of weekly returns between VUG and XLB is 0.43 over 3 years, 0.12 over 1 year and 0.60 over 5 years.
Is XLB a good diversifier for VUG?
Yes, to a useful degree: a correlation of 0.43 leaves real independence between the two, which historically damped combined volatility.
How much do VUG and XLB overlap?
0.5% by weight, across 4 common holdings, based on issuer-disclosed portfolios as of 2026-07-31.
Use this data
$ curl https://www.pairbook.io/api/v1/pairs/vug-vs-xlb.json
Embed this badge (it refreshes with the data), with attribution:
[](https://www.pairbook.io/pair/vug-vs-xlb/)
No key needed, free to use. Full endpoint list in the API documentation.
Related comparisons
Hubs: VUG correlations · XLB correlations
