VUG vs XLF: Correlation & Overlap
Measured on weekly returns over the past three years, Vanguard Growth ETF (VUG) and Financial Select Sector SPDR Fund (XLF) carry a correlation of 0.60, a strong link. By holdings, the two funds overlap 4.1% by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are VUG and XLF?
On 3 years of weekly data the VUG/XLF correlation comes out at 0.60, strong. The link has loosened recently: the 1-year correlation (0.47) runs below the 3-year figure (0.60). The 5-year figure is 0.65, and annualized covariance runs at 187.8 %².
Among the 103 assets we track against VUG, XLF ranks #55 by 3-year correlation. The trailing year gives VUG the advantage: +16.2% versus +9.3%, a 6.9-point spread. Do not treat this figure as fixed: across three years the rolling one-year correlation ranged all the way from 0.25 to 0.78.
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 XLF: side by side
| VUG (Vanguard Growth ETF) | XLF (Financial Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +16.2% | +9.3% |
| 5-year return | +78.4% | +64.2% |
| Volatility (ann.) | 19.4% | 16.2% |
| Beta vs S&P 500 | 1.28 | 0.84 |
| Max drawdown (3Y) | -22.8% | -15.5% |
| Dividend yield | 0.40% | 1.42% |
| Expense ratio | 0.03% | 0.08% |
| Assets under management | $372.0B | $57.9B |
| 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. 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 VUG and XLF
The two portfolios are largely distinct. Weighing the shared positions, 4.1% of the two funds is identical, spread across 11 common holdings. That shared book is a large part of why the returns line up.
| Common holding | Weight in VUG | Weight in XLF |
|---|---|---|
| V | 1.66% | 7.74% |
| MA | 1.28% | 5.87% |
| MCO | 0.22% | 0.94% |
| HOOD | 0.20% | 1.04% |
| BX | 0.15% | 1.29% |
| XYZ | 0.14% | 0.54% |
| MSCI | 0.13% | 0.50% |
| COIN | 0.10% | 0.49% |
| ARES | 0.09% | 0.36% |
| APO | 0.09% | 0.75% |
| IBKR | 0.07% | 0.53% |
Largest positions held only by VUG: NVDA (12.84%), AAPL (12.63%), MSFT (9.61%), GOOGL (5.81%), AMZN (5.16%). Only by XLF: JPM (11.61%), BRK.B (11.25%), BAC (4.94%), GS (3.73%), WFC (3.17%).
Overlap = sum of the smaller of the two weights across common holdings, from issuer disclosures as of 2026-07-31. Top 11 common positions shown.
Year-by-year returns
| Year | VUG | XLF |
|---|---|---|
| 2022 | -33.2% | -10.6% |
| 2023 | +46.8% | +12.0% |
| 2024 | +32.7% | +30.6% |
| 2025 | +19.4% | +14.9% |
| 2026 | +9.6% | +6.6% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are VUG and XLF good diversifiers for each other?
To a limited degree. At 0.60 the two still catch most of the same waves, so the pair smooths returns a little without insulating either from a shared selloff.
FAQ
What is the correlation between VUG and XLF?
Using weekly returns as of 2026-08-27: 0.60 over 3 years, with 0.47 over the last year and 0.65 over 5 years.
Is XLF a good diversifier for VUG?
To a limited degree. At 0.60 the two still catch most of the same waves, so the pair smooths returns a little without insulating either from a shared selloff.
How much do VUG and XLF overlap?
The two funds share 11 holdings amounting to 4.1% of weight, per issuer portfolio files dated 2026-07-31.
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Hubs: VUG correlations · XLF correlations
