VYM vs XLC: Correlation & Overlap
How closely do Vanguard High Dividend Yield ETF (VYM) and Communication Services Select Sector SPDR Fund (XLC) trade together? Their weekly returns over three years give a correlation of 0.61, which is strong. By holdings, the two funds overlap 3.0% by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are VYM and XLC?
Across a 3-year window, the weekly returns of VYM and XLC correlate at 0.61, strong. The link has loosened recently: the 1-year correlation (0.38) runs below the 3-year figure (0.61). Stretching to 5 years gives 0.63, with an annualized covariance of 119.1 %².
By 3-year correlation, XLC places #68 of the 122 assets tracked against VYM. Their recent paths diverged sharply: over the last 12 months VYM outperformed by 19.6 percentage points (+21.1% for VYM against +1.5% for XLC). Do not treat this figure as fixed: across three years the rolling one-year correlation ranged all the way from 0.31 to 0.84.
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.
VYM vs XLC: side by side
| VYM (Vanguard High Dividend Yield ETF) | XLC (Communication Services Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +21.1% | +1.5% |
| 5-year return | +76.6% | +37.5% |
| Volatility (ann.) | 12.3% | 16.0% |
| Beta vs S&P 500 | 0.69 | 0.90 |
| Max drawdown (3Y) | -14.5% | -18.0% |
| Dividend yield | 2.24% | 1.32% |
| Expense ratio | 0.04% | 0.08% |
| Assets under management | $99.2B | $21.7B |
| Sector / category | ETF · Dividend | Sector ETF |
VYM, Vanguard's Large Value fund, carries $99.2B under management, 604 holdings, a 0.04% expense ratio, a 2.24% 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 VYM and XLC
The two portfolios are largely distinct, with 8 holdings in common adding up to 3.0% of fund weight. Where correlation shows the co-movement, the overlap shows its source.
| Common holding | Weight in VYM | Weight in XLC |
|---|---|---|
| VZ | 0.80% | 4.99% |
| DIS | 0.69% | 4.88% |
| T | 0.64% | 5.20% |
| CMCSA | 0.35% | 4.93% |
| TMUS | 0.34% | 4.53% |
| OMC | 0.09% | 4.52% |
| FOXA | 0.05% | 2.50% |
| FOX | 0.03% | 1.56% |
Largest positions held only by VYM: AVGO (7.37%), JPM (3.83%), XOM (2.63%), JNJ (2.51%), CSCO (1.87%). Only by XLC: META (16.73%), GOOGL (10.29%), GOOG (8.22%), NFLX (4.84%), WBD (4.65%).
Overlap = sum of the smaller of the two weights across common holdings, from issuer disclosures as of 2026-07-31. Top 8 common positions shown.
Year-by-year returns
| Year | VYM | XLC |
|---|---|---|
| 2022 | -0.4% | -37.6% |
| 2023 | +6.6% | +52.8% |
| 2024 | +17.6% | +34.7% |
| 2025 | +15.4% | +23.1% |
| 2026 | +15.9% | -4.8% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are VYM and XLC good diversifiers for each other?
Only partially. A correlation of 0.61 means VYM and XLC share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
FAQ
What is the correlation between VYM and XLC?
The VYM/XLC correlation stands at 0.61 on a 3-year window (1 year: 0.38, 5 years: 0.63), computed from weekly returns as of 2026-08-27.
Is XLC a good diversifier for VYM?
Only partially. A correlation of 0.61 means VYM and XLC share most of their swings. Pairing them dampens volatility somewhat, but it will not protect against a common drawdown.
How much do VYM and XLC overlap?
The two funds share 8 holdings amounting to 3.0% of weight, per issuer portfolio files dated 2026-07-31.
Use this data
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Related comparisons
Hubs: VYM correlations · XLC correlations
