VYM vs XLP: Correlation & Overlap
How closely do Vanguard High Dividend Yield ETF (VYM) and Consumer Staples Select Sector SPDR Fund (XLP) trade together? Their weekly returns over three years give a correlation of 0.57, which is moderate. Looking through to holdings, 7.9% of the two portfolios is the same by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are VYM and XLP?
On 3 years of weekly data the VYM/XLP correlation comes out at 0.57, moderate. Little has changed lately, as the 1-year reading of 0.52 lands near the 3-year figure. The 5-year figure is 0.67, and annualized covariance runs at 78.0 %².
By 3-year correlation, XLP places #83 of the 122 assets tracked against VYM. On 12-month performance VYM holds a 12.8-point edge, +21.1% against +8.3%. Across three years, the rolling one-year figure varied moderately, from 0.51 to 0.77.
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 XLP: side by side
| VYM (Vanguard High Dividend Yield ETF) | XLP (Consumer Staples Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +21.1% | +8.3% |
| 5-year return | +76.6% | +34.7% |
| Volatility (ann.) | 12.3% | 11.1% |
| Beta vs S&P 500 | 0.69 | 0.23 |
| Max drawdown (3Y) | -14.5% | -9.7% |
| Dividend yield | 2.24% | 2.58% |
| Expense ratio | 0.04% | 0.08% |
| Assets under management | $99.2B | $14.6B |
| 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, 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 VYM and XLP
The two portfolios are largely distinct. Weighing the shared positions, 7.9% of the two funds is identical, spread across 28 common holdings. That shared book is a large part of why the returns line up.
| Common holding | Weight in VYM | Weight in XLP |
|---|---|---|
| KO | 1.39% | 7.34% |
| PG | 1.37% | 7.10% |
| PM | 1.21% | 6.36% |
| PEP | 0.78% | 4.39% |
| MO | 0.46% | 4.21% |
| MDLZ | 0.33% | 4.37% |
| CL | 0.30% | 4.56% |
| TGT | 0.27% | 4.67% |
| SYY | 0.17% | 2.50% |
| KDP | 0.16% | 2.75% |
| ADM | 0.15% | 2.42% |
| KVUE | 0.15% | 2.32% |
| KMB | 0.15% | 2.30% |
| KR | 0.13% | 2.08% |
| DG | 0.11% | 1.70% |
Largest positions held only by VYM: AVGO (7.37%), JPM (3.83%), XOM (2.63%), JNJ (2.51%), CSCO (1.87%). Only by XLP: WMT (9.62%), COST (8.92%), MNST (4.28%), CASY (1.87%), CHD (1.53%).
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 | XLP |
|---|---|---|
| 2022 | -0.4% | -0.8% |
| 2023 | +6.6% | -0.8% |
| 2024 | +17.6% | +12.2% |
| 2025 | +15.4% | +1.5% |
| 2026 | +15.9% | +10.9% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are VYM and XLP good diversifiers for each other?
To a limited degree. At 0.57 the two still catch most of the same waves, so the pair smooths returns a little without insulating either from a shared selloff.
FAQ
What is the correlation between VYM and XLP?
The VYM/XLP correlation stands at 0.57 on a 3-year window (1 year: 0.52, 5 years: 0.67), computed from weekly returns as of 2026-08-27.
Is XLP a good diversifier for VYM?
To a limited degree. At 0.57 the two still catch most of the same waves, so the pair smooths returns a little without insulating either from a shared selloff.
How much do VYM and XLP overlap?
Per the issuers' own portfolio disclosures (2026-07-31), the overlap is 7.9% by weight over 28 common positions.
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Hubs: VYM correlations · XLP correlations
