VYM vs XLK: Correlation & Overlap
Measured on weekly returns over the past three years, Vanguard High Dividend Yield ETF (VYM) and Technology Select Sector SPDR Fund (XLK) carry a correlation of 0.57, a moderate link. By holdings, the two funds overlap 13.1% by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are VYM and XLK?
On 3 years of weekly data the VYM/XLK correlation comes out at 0.57, moderate. The past 12 months show a weaker link (0.40) than the 3-year average (0.57). The 5-year figure is 0.63, and annualized covariance runs at 169.4 %².
By 3-year correlation, XLK places #82 of the 122 assets tracked against VYM. Their recent paths diverged sharply: over the last 12 months XLK outperformed by 22.3 percentage points (+21.1% for VYM against +43.4% for XLK). Do not treat this figure as fixed: across three years the rolling one-year correlation ranged all the way from 0.31 to 0.82. Risk is not evenly split, since XLK carries 2.0 times the volatility of the other side.
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 XLK: side by side
| VYM (Vanguard High Dividend Yield ETF) | XLK (Technology Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +21.1% | +43.4% |
| 5-year return | +76.6% | +145.2% |
| Volatility (ann.) | 12.3% | 24.0% |
| Beta vs S&P 500 | 0.69 | 1.50 |
| Max drawdown (3Y) | -14.5% | -25.7% |
| Dividend yield | 2.24% | 0.45% |
| Expense ratio | 0.04% | 0.08% |
| Assets under management | $99.2B | $115.4B |
| 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, XLK sits in the Technology category at State Street Investment Management, with $115.4B under management, 73 holdings, a 0.08% expense ratio, a 0.45% trailing dividend yield.
Portfolio overlap between VYM and XLK
The two portfolios are largely distinct, with 20 holdings in common adding up to 13.1% of fund weight. Where correlation shows the co-movement, the overlap shows its source.
| Common holding | Weight in VYM | Weight in XLK |
|---|---|---|
| AVGO | 7.37% | 4.61% |
| CSCO | 1.87% | 2.97% |
| TXN | 1.02% | 1.59% |
| ORCL | 0.91% | 1.69% |
| IBM | 0.86% | 1.45% |
| ADI | 0.73% | 1.21% |
| QCOM | 0.63% | 1.15% |
| DELL | 0.50% | 0.90% |
| ACN | 0.41% | 0.75% |
| HPE | 0.26% | 0.49% |
| TEL | 0.24% | 0.40% |
| NXPI | 0.24% | 0.38% |
| MCHP | 0.16% | 0.27% |
| NTAP | 0.14% | 0.26% |
| CTSH | 0.11% | 0.20% |
Largest positions held only by VYM: JPM (3.83%), XOM (2.63%), JNJ (2.51%), ABBV (1.81%), BAC (1.67%). Only by XLK: NVDA (13.91%), AAPL (12.61%), MSFT (10.10%), AMD (4.09%), MU (3.99%).
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 | VYM | XLK |
|---|---|---|
| 2022 | -0.4% | -27.7% |
| 2023 | +6.6% | +56.0% |
| 2024 | +17.6% | +21.6% |
| 2025 | +15.4% | +24.6% |
| 2026 | +15.9% | +31.3% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are VYM and XLK good diversifiers for each other?
Somewhat, no more. With 0.57 correlation, most large moves hit both names, and the diversification benefit stays modest.
FAQ
What is the correlation between VYM and XLK?
Using weekly returns as of 2026-08-27: 0.57 over 3 years, with 0.40 over the last year and 0.63 over 5 years.
Is XLK a good diversifier for VYM?
Somewhat, no more. With 0.57 correlation, most large moves hit both names, and the diversification benefit stays modest.
How much do VYM and XLK overlap?
The two funds share 20 holdings amounting to 13.1% of weight, per issuer portfolio files dated 2026-07-31.
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Related comparisons
Hubs: VYM correlations · XLK correlations
