VYM vs XLU: Correlation & Overlap
Vanguard High Dividend Yield ETF (VYM) and Utilities Select Sector SPDR Fund (XLU) show a moderate relationship: their 3-year correlation of weekly returns is 0.49. The two funds also share 4.9% of their portfolios by weight.
Data as of 2026-08-27 · refreshed every trading day · weekly returns · methodology
How correlated are VYM and XLU?
Over the past 3 years, VYM and XLU moved with a correlation of 0.49, which is moderate. Lately the two have drifted apart, with the 1-year correlation at 0.29 versus 0.49 over 3 years. Over 5 years the correlation is 0.59, and the annualized covariance of weekly returns is 94.2 %².
Among the 122 assets we track against VYM, XLU ranks #101 by 3-year correlation. The last year tells two different stories: VYM led by 17.0 percentage points, +21.1% for VYM against +4.1% for XLU. The rolling one-year correlation moved between 0.24 and 0.66 over the past three years, a moderate range.
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 XLU: side by side
| VYM (Vanguard High Dividend Yield ETF) | XLU (Utilities Select Sector SPDR Fund) | |
|---|---|---|
| 1-year return | +21.1% | +4.1% |
| 5-year return | +76.6% | +46.3% |
| Volatility (ann.) | 12.3% | 15.8% |
| Beta vs S&P 500 | 0.69 | 0.26 |
| Max drawdown (3Y) | -14.5% | -13.1% |
| Dividend yield | 2.24% | 2.70% |
| Expense ratio | 0.04% | 0.08% |
| Assets under management | $99.2B | $23.1B |
| Sector / category | ETF · Dividend | Sector ETF |
On the fund side, VYM sits in the Large Value category at Vanguard, with $99.2B under management, 604 holdings, a 0.04% expense ratio, a 2.24% trailing dividend yield. XLU is an Utilities fund from State Street Investment Management: $23.1B under management, 31 holdings, a 0.08% expense ratio, a 2.70% trailing dividend yield.
Portfolio overlap between VYM and XLU
The two portfolios are largely distinct: 4.9% of the funds' weight sits in the same underlying holdings (28 common positions). Correlation tells you they move together; overlap tells you why.
| Common holding | Weight in VYM | Weight in XLU |
|---|---|---|
| NEE | 0.74% | 12.94% |
| SO | 0.43% | 7.45% |
| DUK | 0.40% | 7.00% |
| AEP | 0.28% | 4.94% |
| D | 0.25% | 4.33% |
| SRE | 0.24% | 4.11% |
| ETR | 0.20% | 3.62% |
| XEL | 0.20% | 3.57% |
| EXC | 0.19% | 3.35% |
| ED | 0.16% | 2.93% |
| PEG | 0.16% | 2.72% |
| WEC | 0.15% | 2.58% |
| AEE | 0.12% | 2.20% |
| DTE | 0.12% | 2.11% |
| ATO | 0.12% | 2.08% |
Largest positions held only by VYM: AVGO (7.37%), JPM (3.83%), XOM (2.63%), JNJ (2.51%), CSCO (1.87%). Only by XLU: CEG (6.58%), VST (3.27%), PCG (2.96%).
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 | XLU |
|---|---|---|
| 2022 | -0.4% | +1.4% |
| 2023 | +6.6% | -7.2% |
| 2024 | +17.6% | +23.3% |
| 2025 | +15.4% | +16.0% |
| 2026 | +15.9% | +2.5% |
Calendar-year price returns; the current year is year-to-date as of the data date above.
Are VYM and XLU good diversifiers for each other?
Reasonably. At 0.49, VYM and XLU keep a meaningful degree of independence, and combining them has historically reduced portfolio volatility.
FAQ
What is the correlation between VYM and XLU?
Using weekly returns as of 2026-08-27: 0.49 over 3 years, with 0.29 over the last year and 0.59 over 5 years.
Is XLU a good diversifier for VYM?
Reasonably. At 0.49, VYM and XLU keep a meaningful degree of independence, and combining them has historically reduced portfolio volatility.
How much do VYM and XLU overlap?
Per the issuers' own portfolio disclosures (2026-07-31), the overlap is 4.9% by weight over 28 common positions.
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Hubs: VYM correlations · XLU correlations
