VUG vs XLP: Correlation & Overlap
Measured on weekly returns over the past three years, Vanguard Growth ETF (VUG) and Consumer Staples Select Sector SPDR Fund (XLP) carry a correlation of 0.13, a weak link. By holdings, the two funds overlap 1.4% by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are VUG and XLP?
Over the past 3 years, VUG and XLP moved with a correlation of 0.13, which is weak. The past 12 months show a weaker link (-0.20) than the 3-year average (0.13). Over 5 years the correlation is 0.38, and the annualized covariance of weekly returns is 27.2 %².
Among the 103 assets we track against VUG, XLP ranks #91 by 3-year correlation. The trailing year gives VUG the advantage: +16.2% versus +8.3%, a 7.9-point spread. Do not treat this figure as fixed: across three years the rolling one-year correlation ranged all the way from -0.20 to 0.50. One caveat on sizing: VUG is 1.7 times as volatile as the other leg, so an equal-dollar split is far from equal-risk.
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 XLP: side by side
| VUG (Vanguard Growth ETF) | XLP (Consumer Staples Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +16.2% | +8.3% |
| 5-year return | +78.4% | +34.7% |
| Volatility (ann.) | 19.4% | 11.1% |
| Beta vs S&P 500 | 1.28 | 0.23 |
| Max drawdown (3Y) | -22.8% | -9.7% |
| Dividend yield | 0.40% | 2.58% |
| Expense ratio | 0.03% | 0.08% |
| Assets under management | $372.0B | $14.6B |
| 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, XLP sits in the Consumer Defensive category at State Street Investment Management, with $14.6B under management, 35 holdings, a 0.08% expense ratio, a 2.58% trailing dividend yield.
Portfolio overlap between VUG and XLP
The two portfolios are largely distinct: 1.4% of the funds' weight sits in the same underlying holdings (2 common positions). Correlation tells you they move together; overlap tells you why.
Largest positions held only by VUG: NVDA (12.84%), AAPL (12.63%), MSFT (9.61%), GOOGL (5.81%), AMZN (5.16%). Only by XLP: WMT (9.62%), KO (7.34%), PG (7.10%), PM (6.36%), TGT (4.67%).
Overlap = sum of the smaller of the two weights across common holdings, from issuer disclosures as of 2026-07-31. Top 2 common positions shown.
Year-by-year returns
| Year | VUG | XLP |
|---|---|---|
| 2022 | -33.2% | -0.8% |
| 2023 | +46.8% | -0.8% |
| 2024 | +32.7% | +12.2% |
| 2025 | +19.4% | +1.5% |
| 2026 | +9.6% | +10.9% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are VUG and XLP good diversifiers for each other?
Yes. With a correlation of 0.13, VUG and XLP have moved largely independently, which makes them a genuinely diversifying pair by historical standards.
FAQ
What is the correlation between VUG and XLP?
As of 2026-08-27, the correlation of weekly returns between VUG and XLP is 0.13 over 3 years, -0.20 over 1 year and 0.38 over 5 years.
Is XLP a good diversifier for VUG?
Yes. With a correlation of 0.13, VUG and XLP have moved largely independently, which makes them a genuinely diversifying pair by historical standards.
How much do VUG and XLP overlap?
Per the issuers' own portfolio disclosures (2026-07-31), the overlap is 1.4% by weight over 2 common positions.
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Hubs: VUG correlations · XLP correlations
