VUG vs XLRE: Correlation & Overlap
Vanguard Growth ETF (VUG) and Real Estate Select Sector SPDR Fund (XLRE) show a moderate relationship: their 3-year correlation of weekly returns is 0.32. By holdings, the two funds overlap 1.0% by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are VUG and XLRE?
On 3 years of weekly data the VUG/XLRE correlation comes out at 0.32, moderate. The link has loosened recently: the 1-year correlation (0.05) runs below the 3-year figure (0.32). The 5-year figure is 0.55, and annualized covariance runs at 103.9 %².
By 3-year correlation, XLRE places #89 of the 103 assets tracked against VUG. The trailing year gives VUG the advantage: +16.2% versus +9.5%, a 6.7-point spread. This link changes with the market regime, having swung between 0.04 and 0.78 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 XLRE: side by side
| VUG (Vanguard Growth ETF) | XLRE (Real Estate Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +16.2% | +9.5% |
| 5-year return | +78.4% | +11.4% |
| Volatility (ann.) | 19.4% | 16.7% |
| Beta vs S&P 500 | 1.28 | 0.57 |
| Max drawdown (3Y) | -22.8% | -16.6% |
| Dividend yield | 0.40% | 3.12% |
| Expense ratio | 0.03% | 0.08% |
| Assets under management | $372.0B | $8.6B |
| Sector / category | ETF · US Style | Sector ETF |
VUG is a Large Growth fund from Vanguard: $372.0B under management, 146 holdings, a 0.03% expense ratio, a 0.40% trailing dividend yield. On the fund side, XLRE sits in the Real Estate category at State Street Investment Management, with $8.6B under management, 31 holdings, a 0.08% expense ratio, a 3.12% trailing dividend yield.
Portfolio overlap between VUG and XLRE
The two portfolios are largely distinct, with 5 holdings in common adding up to 1.0% of fund weight. Where correlation shows the co-movement, the overlap shows its source.
| Common holding | Weight in VUG | Weight in XLRE |
|---|---|---|
| WELL | 0.48% | 11.43% |
| EQIX | 0.30% | 7.14% |
| O | 0.10% | 4.46% |
| SBAC | 0.07% | 1.99% |
| CSGP | 0.03% | 1.33% |
Largest positions held only by VUG: NVDA (12.84%), AAPL (12.63%), MSFT (9.61%), GOOGL (5.81%), AMZN (5.16%). Only by XLRE: PLD (9.06%), AMT (5.49%), DLR (5.01%), VMRK (4.96%), SPG (4.72%).
Overlap = sum of the smaller of the two weights across common holdings, from issuer disclosures as of 2026-07-31. Top 5 common positions shown.
Year-by-year returns
| Year | VUG | XLRE |
|---|---|---|
| 2022 | -33.2% | -26.2% |
| 2023 | +46.8% | +12.4% |
| 2024 | +32.7% | +5.1% |
| 2025 | +19.4% | +2.6% |
| 2026 | +9.6% | +12.4% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are VUG and XLRE good diversifiers for each other?
Reasonably. At 0.32, VUG and XLRE keep a meaningful degree of independence, and combining them has historically reduced portfolio volatility.
FAQ
What is the correlation between VUG and XLRE?
The VUG/XLRE correlation stands at 0.32 on a 3-year window (1 year: 0.05, 5 years: 0.55), computed from weekly returns as of 2026-08-27.
Is XLRE a good diversifier for VUG?
Reasonably. At 0.32, VUG and XLRE keep a meaningful degree of independence, and combining them has historically reduced portfolio volatility.
How much do VUG and XLRE overlap?
1.0% by weight, across 5 common holdings, based on issuer-disclosed portfolios as of 2026-07-31.
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Related comparisons
Hubs: VUG correlations · XLRE correlations
