VUG vs XLY: Correlation & Overlap
How closely do Vanguard Growth ETF (VUG) and Consumer Discretionary Select Sector SPDR Fund (XLY) trade together? Their weekly returns over three years give a correlation of 0.83, which is very strong. The two funds also share 11.4% of their portfolios by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are VUG and XLY?
Over the past 3 years, VUG and XLY moved with a correlation of 0.83, which is very strong, meaning they move nearly in lockstep. Little has changed lately, as the 1-year reading of 0.77 lands near the 3-year figure. Over 5 years the correlation is 0.87, and the annualized covariance of weekly returns is 315.9 %².
Among the 103 assets we track against VUG, XLY ranks #21 by 3-year correlation. The last year tells two different stories: VUG led by 16.3 percentage points, +16.2% for VUG against -0.1% for XLY. The link looks structural: the rolling one-year correlation barely moved, holding between 0.78 and 0.90.
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 XLY: side by side
| VUG (Vanguard Growth ETF) | XLY (Consumer Discretionary Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +16.2% | -0.1% |
| 5-year return | +78.4% | +31.8% |
| Volatility (ann.) | 19.4% | 19.7% |
| Beta vs S&P 500 | 1.28 | 1.15 |
| Max drawdown (3Y) | -22.8% | -26.0% |
| Dividend yield | 0.40% | 0.78% |
| Expense ratio | 0.03% | 0.08% |
| Assets under management | $372.0B | $22.5B |
| 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. XLY is a Consumer Cyclical fund from State Street Investment Management: $22.5B under management, 47 holdings, a 0.08% expense ratio, a 0.78% trailing dividend yield.
Portfolio overlap between VUG and XLY
The two portfolios are largely distinct. Weighing the shared positions, 11.4% of the two funds is identical, spread across 19 common holdings. That shared book is a large part of why the returns line up.
| Common holding | Weight in VUG | Weight in XLY |
|---|---|---|
| AMZN | 5.16% | 24.32% |
| TSLA | 2.45% | 16.18% |
| MCD | 0.55% | 4.11% |
| TJX | 0.50% | 3.55% |
| BKNG | 0.44% | 4.04% |
| SBUX | 0.35% | 3.08% |
| MAR | 0.24% | 1.96% |
| ORLY | 0.22% | 1.85% |
| DASH | 0.22% | 2.24% |
| HLT | 0.22% | 1.89% |
| ABNB | 0.19% | 1.96% |
| AZO | 0.16% | 1.23% |
| CMG | 0.15% | 1.19% |
| CVNA | 0.14% | 1.32% |
| YUM | 0.14% | 1.06% |
Largest positions held only by VUG: NVDA (12.84%), AAPL (12.63%), MSFT (9.61%), GOOGL (5.81%), GOOG (4.64%). Only by XLY: HD (5.54%), LOW (2.94%), GM (1.94%), ROST (1.90%), F (1.36%).
Overlap = sum of the smaller of the two weights across common holdings, from issuer disclosures as of 2026-07-31. Top 15 common positions shown.
Year-by-year returns
| Year | VUG | XLY |
|---|---|---|
| 2022 | -33.2% | -36.3% |
| 2023 | +46.8% | +39.6% |
| 2024 | +32.7% | +26.5% |
| 2025 | +19.4% | +7.4% |
| 2026 | +9.6% | -2.6% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are VUG and XLY good diversifiers for each other?
Not really. At 0.83, the two trade almost as one position, and owning both buys little extra protection.
FAQ
What is the correlation between VUG and XLY?
The VUG/XLY correlation stands at 0.83 on a 3-year window (1 year: 0.77, 5 years: 0.87), computed from weekly returns as of 2026-08-27.
Is XLY a good diversifier for VUG?
Not really. At 0.83, the two trade almost as one position, and owning both buys little extra protection.
How much do VUG and XLY overlap?
Per the issuers' own portfolio disclosures (2026-07-31), the overlap is 11.4% by weight over 19 common positions.
Use this data
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Hubs: VUG correlations · XLY correlations
