VUG vs XLC: Correlation & Overlap
Vanguard Growth ETF (VUG) and Communication Services Select Sector SPDR Fund (XLC) show a very strong relationship: their 3-year correlation of weekly returns is 0.81. Looking through to holdings, 15.4% 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 VUG and XLC?
Over the past 3 years, VUG and XLC moved with a correlation of 0.81, which is very strong, meaning they move nearly in lockstep. Little has changed lately, as the 1-year reading of 0.76 lands near the 3-year figure. Over 5 years the correlation is 0.84, and the annualized covariance of weekly returns is 251.1 %².
By 3-year correlation, XLC places #22 of the 103 assets tracked against VUG. On 12-month performance VUG holds a 14.7-point edge, +16.2% against +1.5%. The rolling one-year correlation stayed in a tight band between 0.67 and 0.90 over the past three years, which points to a structural rather than episodic relationship.
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 XLC: side by side
| VUG (Vanguard Growth ETF) | XLC (Communication Services Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +16.2% | +1.5% |
| 5-year return | +78.4% | +37.5% |
| Volatility (ann.) | 19.4% | 16.0% |
| Beta vs S&P 500 | 1.28 | 0.90 |
| Max drawdown (3Y) | -22.8% | -18.0% |
| Dividend yield | 0.40% | 1.32% |
| Expense ratio | 0.03% | 0.08% |
| Assets under management | $372.0B | $21.7B |
| Sector / category | ETF · US Style | Sector ETF |
VUG, Vanguard's Large Growth fund, carries $372.0B under management, 146 holdings, a 0.03% expense ratio, a 0.40% trailing dividend yield. On the fund side, XLC sits in the Communications category at State Street Investment Management, with $21.7B under management, 24 holdings, a 0.08% expense ratio, a 1.32% trailing dividend yield.
Portfolio overlap between VUG and XLC
The two portfolios partially overlap, with 9 holdings in common adding up to 15.4% of fund weight. Where correlation shows the co-movement, the overlap shows its source.
| Common holding | Weight in VUG | Weight in XLC |
|---|---|---|
| GOOGL | 5.81% | 10.29% |
| GOOG | 4.64% | 8.22% |
| META | 3.41% | 16.73% |
| NFLX | 0.86% | 4.84% |
| APP | 0.32% | 1.30% |
| TTWO | 0.14% | 4.14% |
| LYV | 0.10% | 4.39% |
| RDDT | 0.07% | 0.32% |
| TKO | 0.03% | 2.13% |
Largest positions held only by VUG: NVDA (12.84%), AAPL (12.63%), MSFT (9.61%), AMZN (5.16%), AVGO (4.47%). Only by XLC: T (5.20%), VZ (4.99%), CMCSA (4.93%), DIS (4.88%), WBD (4.65%).
Overlap = sum of the smaller of the two weights across common holdings, from issuer disclosures as of 2026-07-31. Top 9 common positions shown.
Year-by-year returns
| Year | VUG | XLC |
|---|---|---|
| 2022 | -33.2% | -37.6% |
| 2023 | +46.8% | +52.8% |
| 2024 | +32.7% | +34.7% |
| 2025 | +19.4% | +23.1% |
| 2026 | +9.6% | -4.8% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are VUG and XLC good diversifiers for each other?
No: a correlation of 0.81 means VUG and XLC tend to fall together, which is precisely when diversification is supposed to help.
FAQ
What is the correlation between VUG and XLC?
As of 2026-08-27, the correlation of weekly returns between VUG and XLC is 0.81 over 3 years, 0.76 over 1 year and 0.84 over 5 years.
Is XLC a good diversifier for VUG?
No: a correlation of 0.81 means VUG and XLC tend to fall together, which is precisely when diversification is supposed to help.
How much do VUG and XLC overlap?
Per the issuers' own portfolio disclosures (2026-07-31), the overlap is 15.4% by weight over 9 common positions.
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Hubs: VUG correlations · XLC correlations
